1. Terminology (S10.1–10.3) Match each of the following terms to one of the definitions or descriptions listed below: sensitivity analysis, scenario analysis, break-even analysis, operating leverage, decision tree, real option, tornado diagram.

a. Recalculation of project NPV by changing several inputs to new but consistent values.

b. Opportunity to modify a project at a future date.

c. Analysis of how project NPV changes if different assumptions are made about sales, costs, and other key variables.

d. The degree to which fixed costs magnify the effect on profits of a shortfall in sales.

e. A graphical technique for displaying possible future events and decisions taken in response to those events.

f. A graphical technique that is often used to display the results of a sensitivity analysis.

g. Determination of the level of future sales at which project profitability or NPV equals zero.