When analyzing a project, scenario analysis is best suited to accomplishing which one of the following?   Multiple Choice   Determining the minimal level of sales required to break even on an accounting basis   Identifying the potential range of reasonable outcomes   Estimating the residual value of fixed assets   Determining how fixed costs affect NPV   Determining the minimal level of sales required to break even on a financial basis

Critically analyse the benefits and limitations of the NPV and Accounting Rate of Return (ARR) investment appraisal methods

The profitability index of a project is also referred to as the project's Blank______. Multiple choice question. average accounting return benefit/cost ratio internal rate of return effective annual rate

Which control is not a part of the fixed asset system?a. formal analysis of the purchase requestb. review of the assumptions used in the capital budgeting modelc. development of an economic order quantity modeld. estimates of anticipated cost savings

Internal Rate of Return is used: a) To determine the interest rate at which benefits of a project are equivalent to its costs. b) To determine which investment to choose when one of two alternatives must be chosen. c) To determine the interest rate for an investment that yields no income. d) To choose an investment that necessary to preserve the operation of the business. e) To justify a “lost-leader” project of a strategic nature.

Why are NPV, BCR, and IRR considered SUPERIOR indicators of Project Feasibility compared to Payback or Recoupment Period and Accounting Rates of Return? Explain briefly.

Net Present Value Method Net present value (NPV) is one method that can be used to evaluate the financial viability of potential projects. It determines the present value of all future cash flows associated with potential projects and measures this against the cost of the project. To use net present value, a required rate of return must be defined. The required rate of return is the minimum -v acceptable rate of return that an investment must yield for it to make sense economically. Managers often choose a required rate of return above their cost of capital to ensure that the inherent uncertainties surrounding future cash flows is addressed. This can be risky, however, as it biases the process toward short-term projects. If the NPV is positive, then the project should be accepted - V ; if it is negative, then the project should be rejected V. Let's look at a net present value example using the present value of an ordinary annuity table. The company has a project with a 5-year life that…

Why do we need to predict how certain costs will behave in response to change activity in project cash-flow analysis?

Explain Incremental Analysis for Cost-Only Projects?

Asset allocation is performed to A) reduce the load that intermediaries charge maximize the earning potential of an B) investment vehicle C) maximize the earning potential of a portfolio protect against significant declines in any D) one investment vehicle O E) maximize the returns from any one vehicle