Which of the following statements is incorrect: Multiple Choice The cost of capital associated with a project investment depends on the risk of that investment. Hard capital rationing occurs when a company experiences financial distress. Sensitivity analysis is useful for pinpointing out where forecasting errors will do the most damage, but it does not tell us what to do about possible errors. Total asset turnover ratio is the same as the capital intensity ratio. The basic idea behind sensitivity analysis is to freeze all the variables except one and then see how sensitive the NPV is to changes in that variable