Which of the Following Statements Is CORRECT

question 76

Multiple Choice

Which of the following statements is CORRECT?

• A) In comparing two projects using sensitivity analysis, the one with the steeper lines would be considered less risky, because a small error in estimating a variable such as unit sales would produce only a small error in the project's NPV.
• B) The primary advantage of simulation analysis over scenario analysis is that scenario analysis requires a relatively powerful computer, coupled with an efficient financial planning software package, whereas simulation analysis can be done efficiently using a PC with a spreadsheet program or even with just a calculator.
• C) Sensitivity analysis is a type of risk analysis that considers both the sensitivity of NPV to changes in key input variables and the probability of occurrence of these variables' values.
• D) As computer technology advances, simulation analysis becomes increasingly obsolete and thus less likely to be used as compared to sensitivity analysis.
• E) Sensitivity analysis as it is generally employed is incomplete in that it fails to consider the probability of occurrence of the key input variables.

Acknowledge the tax implications and reporting for flow-through entities.

Know about the tax treatment of security deposits and advance rental payments.

Understand how capital improvements and other expenses paid by tenants are treated for tax purposes.

Recognize the correct depreciation method for residential rental properties.

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Definitions:

Leader Job Performance

The effectiveness with which a leader accomplishes their responsibilities and goals in an organizational setting.

Group Performance

The effectiveness and outcomes achieved by a group of individuals working together towards common goals.

Consideration

The trait of being thoughtful or considerate about the feelings and needs of others, often seen as an important leadership quality.

Leader Reward

Practices or mechanisms through which leaders provide positive reinforcement to followers for their achievements and performance.