Question
You finish the day with various meetings, phone calls, and tasks. You meet with your VP of Finance to discuss various tools to use to
You finish the day with various meetings, phone calls, and tasks.
You meet with your VP of Finance to discuss various tools to use to evaluate the risk of projects. Your VP of Finance makes the following statements:
1. If we use sensitivity analysis we will be able to capture the effects of changes in multiple value drivers in a single project.
2. Break-even analysis will tell us when we have a $0 NPV.
3. Accounting Break-even (EBIT) will tall us the number of units that must be sold for operating profit to equal $0.
4. Any sales below an economic break-even will produce an economic profit for the firm.
Which comment is correct:
Statement 1
Statement 3
Statement 4
Statement 2
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