If a Project Has a Positive NPV, Then the Real

question 78

True/False

If a project has a positive NPV, then the real options that affect the project are not important to estimating the value of the project.

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Definitions:

Variances

The differences between planned or expected financial outcomes and the actual results achieved.

Fixed Budget

A budget that outlines expected revenues and expenses over a specific period, which does not adjust in response to changes in business activity levels.

Static Budget

A budget that does not change or adapt to variations in business activity levels throughout the budgeting period.

Sales Variance Analysis

A financial process used to compare the actual sales against forecasted sales to understand variances and their causes.