Which of the following statements is true or false? A capital budget lists the projects and investments that a company plans to undertake during the coming year. The break-even level of an input is the level for which the investment has an IRR of zero. The most difficult part of capital budgeting is deciding how to estimate the cash flows and the cost of capital. In Scenario Analysis, one parameter is changed after the other to investigate the effect on the NPV, whereas in Sensitivity Analysis all parameters are changed simultaneously. Many investments will also require an increase of net working capital which will reduce the available free cash flow from the project. |Sunk costs should not be included in the cash flow forecasts of a project, whereas opportunity costs should be considered in the projects NPV calculation