8. The sales level that results in a project's net income exactly equaling zero is called the_____ break-even.a. operationalb. leveragedC. accountingd. cashe. financial Show
SECTION: 11.3TOPIC: ACCOUNTING BREAK-EVENTYPE: DEFINITIONS9. The sales level that results in a project's operating cash flow exactly equaling zero is calledthe _____ break-even. SECTION: 11.4TOPIC: CASH BREAK-EVENTYPE: DEFINITIONS 10. The sales level that results in a project's net present value exactly equaling zero is calledthe _____ break-even.  SECTION: 11.4TOPIC: FINANCIAL BREAK-EVENTYPE: DEFINITIONS11. Operating leverage is the: SECTION: 11.5TOPIC: OPERATING LEVERAGETYPE: DEFINITIONS12. The percentage change in operating cash flow relative to the percentage change inquantity sold is called the:a. marginal profit.B. degree of operating leverage.c. gross profit.d. net profit.e. contribution margin. SECTION: 11.5TOPIC: DEGREE OF OPERATING LEVERAGETYPE: DEFINITIONS 13. The procedure of allocating a fixed amount of funds for capital spending to each businessunit is called: SECTION: 11.6TOPIC: SOFT RATIONINGTYPE: DEFINITIONS14. Hard rationing is defined as the situation where: SECTION: 11.6TOPIC: HARD RATIONINGTYPE: DEFINITIONS15. Forecasting risk emphasizes the point that the correctness of any decision to accept orreject a project is highly dependent upon the: SECTION: 11.1TOPIC: FORECASTING RISKTYPE: CONCEPTS CHAPTER 8 Risk Analysis, Real Options, and Capital Budgeting Multiple Choice Questions: I.DEFINITIONS SCENARIO ANALYSIS b1.An analysis of what happens to the estimate of the net present value when you examine a number of different likely situations is called _____ analysis. a.forecasting b.scenario c.sensitivity d.simulation e.break-even Difficulty level: Easy SENSITIVITY ANALYSIS c2.An analysis of what happens to the estimate of net present value when only one variable is changed is called _____ analysis. a.forecasting b. scenario c.sensitivity d.simulation e.break-even Difficulty level: Easy SIMULATION ANALYSIS d3. An analysis which combines scenario analysis with sensitivity analysis is called _____ analysis. a.forecasting b.scenario c.sensitivity d.simulation e.break-even Difficulty level: Easy BREAK-EVEN ANALYSIS e4.An analysis of the relationship between the sales volume and various measures of profitability is called _____ analysis. a.forecasting b.scenario c. sensitivity d.simulation e.break-even Difficulty level: Easy 8-1 When a project breaks even on an accounting basis the cash flow for that period will equal?whenever a project breaks even on an accounting basis, the cash flow for that period will equal the depreciation. The bad news is that a project that just breaks even on an accounting basis has a negative NPV and a zero return.
Is the percentage change in operating cash flow relative to the percentage change in quantity sold?The degree of operating leverage (DOL) is the percentage change in operating cash flow relative to the percentage change in quantity sold.
Which one of the following is the equation for estimating operating cash flows?Operating Cash Flow = Operating Income + Depreciation – Taxes + Change in Working Capital.
Which of the following refers to an investigation of what happens to net present value when only one variable is changed?Apart from scenario analysis, sensitivity analysis would test how NPV changes when one of related variables either increases or decreases.
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The sales level that results in a zero operating cash flow is called the break-even.
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