Use the Following Two Statements to Answer This Question

question 23

Multiple Choice

Use the following two statements to answer this question:
I.Sensitivity analysis examines how an investment's NPV changes as we change the values of more than one input variable at a time.
II.Scenario analysis examines how an investment's NPV changes as we change the value of one input variable at a time.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct, II is incorrect.
• D)I is incorrect, II is correct.

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Definitions:

Preferential Unsecured Creditor

A creditor who is not secured by collateral but has the right to be paid before other unsecured creditors in the event of a debtor's bankruptcy.

Trade Creditors

Entities to whom money is owed for goods and services provided in the normal course of business, but which has not yet been paid.

Liquidator's Fee

Charges or payments made to a liquidator for the process of winding up a company, disposing of its assets, and discharging its liabilities.

Voluntary Winding Up

A process initiated by a company's shareholders to dissolve the company in an orderly manner, liquidating assets to pay creditors and distributing any remaining assets.