Last quest is asking if its true/false.

5. Methods of analyzing risk for capital budgeting decisions Aa Aa Several types of analyses are available for evaluating a project's risk. In the following table, correcdy identify the analysis being described. Scenario Sensitivity Simulation Analysis Analysis Analysis Requires changes in one assumption at a time to observe the impact on NPV Estimates the NPV after a given period of time, assuming specific changes in the values of multiple key factors that could affect a project's NPV Uses an algorithmic method to pick values randomly from probability distributions to calculate a project's NPV O O Consider the follawing case: Coppinger Corp. is considering the use of a compuber to assign probability distributions to the input variables used in the analysis. The computer would then randomly select input variables from their distributions and calculate NPVs based on those selections. What kind of analysis is this? O Simulation analysis O Scenario analysis O Sensitivity analysis Suppose Coppinger Corp. is evaluating a new capital budgeting projedt and conducting some basic risk analysis. First, it calculates the project's NPV at various levels for the project's key input variables. Coppinger next calculates the project's NPV at various prices per unit, plats the results on the accompanying graph, and then repeats this process separately for variable cost per unit and required retum. This process is a results are shown on the graph. whose sensitivity analysIS scenario analysis simulation analysis NPV (Milions of $ 200 Price per 40 Required Return 120 Cost per Unit 200 -20 12 20 DEVIATION 1%) 12 According to this analysis, which variable is the key value At the current input-value estimates, does this project driver for the project? have a positive or negative NPV? O Variable cost per unit O Required retum O Price per unit O Negative NPV O Positive NPV Decision trees are a visual representation of the sequential choices that financial dedision makers face when making capital budgeting and investment dedisions. True or False: The beginning of the project is less risky than laten stages