Use the Information Below to Answer the Following Question(s)

question 147

Multiple Choice

Use the information below to answer the following question(s) .Wet Water Company drills residential and commercial wells.The company is in the process of analyzing the purchase of a new drill.Information on the proposal is provided below:
Note: Other than the initial investment, cash flows are end of period.The working capital is returned at the end of the investment period.
-A "what-if" technique that examines how a result will change if the original predicted data are not achieved, or if an underlying assumption changes, is called

• A)sensitivity analysis.
• B)net present value analysis.
• C)internal rate of return analysis.
• D)adjusted rate of return analysis.
• E)payback method.

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Definitions:

Desirable Traits

Characteristics or qualities that are considered attractive, beneficial, or valuable in a person or thing.

Awareness

Awareness is the state or ability to perceive, feel, or be conscious of events, objects, or sensory patterns.

Psychological Investment

The emotional or mental resources devoted by an individual to a particular task, idea, or relationship.

Commitment

The state or quality of being dedicated to a cause, activity, or significant other, often involving a promise or assurance to continue involvement.