Q3

A)

The analysis of the effects on a project's net present value when only one variable changes is called ______ analysis.

	a.	Upper and lower bound.
	b.	Break-even.
	c.	Scenario.
	d.	Sensitivity.
	e.	Simulation.

B)

The Better Bilt Co. is fairly cautious when considering new projects and therefore analyzes each project using the most optimistic, the most realistic, and the most pessimistic value for each variable. The company is conducting:

	a.	Sensitivity analysis.
	b.	Competitive analysis.
	c.	Forecasting research.
	d.	Break-even analysis.
	e.	Scenario analysis.

C)

The best case scenario analysis is based on the _____ expected sales quantity, the _____ expected sales price, and the _____ expected costs per unit.

	a.	Lowest; lowest; highest.
	b.	Lowest; lowest; lowest.
	c.	Highest; highest; highest.
	d.	Highest; highest; lowest.
	e.	Highest; lowest; lowest.

D)

You want to determine how changes in the price of a product affect a project's NPV and IRR. To best determine the impact, you would most likely use ____________.

	a.	Scenario analysis.
	b.	Base-case analysis.
	c.	Multiple-outcome analysis.
	d.	Sensitivity analysis.
	e.	Simulation analysis.