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
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