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19. If you decrease your discount rate, all other things being equal, the NPV of your project will decrease as well. A. True B. False
19. If you decrease your discount rate, all other things being equal, the NPV of your project will decrease as well. A. True B. False 20. Examining which inputs to a model are particularly critical and which are of more limited importance is a part of "sensitivity" analysis. A. True B. False 21. If you want to understand the distribution of possible NPVs around the "expected" NPV, you could run a Monte Carlo simulation. A. True B. False 22. In the market, a "call" option gives you the right to sell a stock at a certain price. A. True B. False 23. Jane and John are employees at Acme Widget, and receive equity awards as part of their compensation, as follows: Share Market Price Share Market Price At Grant Date 2 Years after Grant Employee Type of Equity # Jane John Stock Options Stock Shares 3,000 1,000 $50.00 $50.00 $100.00 $100.00 Options granted at market price at grant date 2 Years after the grant date, John's shares of stock are worth: A. $50,000 B. $30,000 C. $25,000 D. $100,000 E. None of the above. 24. 2 years after the grant date, Jane's options are worth: A. $50,000 B. $25,000 C. $150,000 D. $100,000 E. None of the above
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