Use the Table for the Question(s)below

question 16

Multiple Choice

Use the table for the question(s) below.
-Which of the following statements is FALSE?

• A)To compute the net present value (NP
• V)for a project, you need to estimate the incremental cash flows and choose a discount rate.
• B)When we are certain regarding the input to a capital budgeting decision, it is often useful to determine the break-even level of that input.
• C)Estimates of the cash flows and cost of capital are often subject to significant uncertainty.
• D)Sensitivity analysis allows us to explore the effects of errors in our estimated inputs in our net present value (NP
• V)analysis for the project.

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Definitions:

Profitability Ratios

Ratios that measure the amount of operating income or net income an organization is able to generate relative to its assets, owners’ equity, and sales.