Scenario Analysis Asks Questions Such As

question 31

Multiple Choice

Scenario analysis asks questions such as:

• A) How will changing the number of units sold affect the outcome of this project?
• B) What is the best outcome that should reasonably be expected?
• C) How much will a $1 increase in the variable cost per unit change the net present value?
• D) Will the net present value increase or decrease if the quantity sold increases by 100 units?
• E) How will the operating cash flow change if the depreciation method is changed?

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Definitions:

Dividend Yield

The ratio of a company's annual dividends relative to its share price, indicating how much income investors are getting from their investment.

Yield-To-Maturity

Yield-to-maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures, incorporating both interest payments and the capital gain or loss realized upon maturity.

Zero-Coupon Bond

A bond bought at a price lower than its face value, with no recurring interest payments, that matures at its face value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, incorporating all interest payments and the repayment of principal, expressed as an annual rate.