Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A) Sensitivity analysis allows us to explore the effects of errors in our estimated inputs in our net present value (NPV) analysis for the project.
• B) To compute the net present value (NPV) for a project, you need to estimate the incremental cash flows and choose a discount rate.
• C) Estimates of the cash flows and cost of capital are often subject to significant uncertainty.
• D) 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.

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