Suppose Coppinger Corp. is evaluating a new capital budgeting project and conducting some basic risk analysis. First, it calculates the projects NPV at various levels for the projects key input variables. Coppinger next calculates the projects NPV at various prices per unit, plots the results on the accompanying graph, and then repeats this process separately for variable cost per unit and required return. This process is a __________, whose results are shown on the graph.

A. sensitivity analysis B. simulation analysis C. scenario analysis

Decision trees are a visual representation of the sequential choices that financial decision makers face when making capital budgeting and investment decisions. True or False: Typically the beginning of the project is riskier than later stages. (A. True Or B. False ?)

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Several types of analyses are available for evaluating a project's risk. In the following table, correctly identify the analysis being described. Consider the following case: Coppinger Corp. is considering the use of a computer 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? Sensitivity analysis Scenario analysis Simulation analysis According to this analysis, which variable is the key value driver for the project? Price per unit Required return Variable cost per unit At the current input-value estimates, does this project have a positive or negative NPV? Negative NPV Positive NPV