Sensitivity Analysis Helps Determine the

question 64

Multiple Choice

Sensitivity analysis helps determine the

• A)range of possible outcomes given possible ranges for each variable.
• B)degree to which the net present value reacts to changes in a single variable.
• C)net present value given the best and the worst possible situations.
• D)degree to which a firm is reliant upon multiple economic factors changing simultaneously.
• E)ideal level of variable costs in relation to the fixed costs of a project.

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Definitions:

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including institutional investors and individual investors.

Net Present Value

A financial metric that calculates the present value of all cash inflows and outflows of a project or investment using a discount rate.

Market Value

The cost existing in the marketplace for trading an asset or service.

Rights Offering

A financial mechanism allowing current shareholders the opportunity to purchase additional shares directly from the company at a predetermined price, often at a discount to the market price.