7. Under current conditions, a corporate investment project involving the construction of a new factory has a Net Present Value (NPV) of $2 million. However, if a recession were to occur, a company analyst believes sales would fall and the discount rate should be adjusted from 8 to 7%, changing the NPV of the project to $1.5 million. This is an example of: a) degree of operating leverage b) sensitivity analysis c) NPV break even analysis d) scenario analysis 8. When salvage value is greater than undepreciated capital cost: a) the firm must pay tax on recaptured depreciation b) the firm gets a tax deduction for a terminal loss c) the firm gets a tax deduction for recaptured depreciation d) the firm has a capital gain