Question
1_If a firm underestimated the risk, that is the opportunity cost of two mutually exclusive projects A_ all of the other answers are correct B_the
1_If a firm underestimated the risk, that is the opportunity cost of two mutually exclusive projects
A_ all of the other answers are correct
B_the NPV COULD be overestimated
C_ an incorrect positive NPV could be calculated
d_the ranking according to the NPV COULD BE INCORRECT
E_Unacceptable projects could be mistakenly accepted
One variable at a time related to the project are randomly, repeatedly modified using a computer program to develop a very wide range of NPVs, which can then be averaged to give an idea of the expected outcome best describes.
a.simulation analysis
b.breakeven analysis
c.none of other answers are correct
d. sensitivity analysis
e.scenario analysis
3. A bond is currently priced at 105% of the face value. If it pays a coupon of $50 annually and mature in 5 years. What is the yield to maturity?
1.95%
5.25%
3.88%
7.76%
cannot be determined
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