Which of the following statements are false? 1. Scenario analysis is best suited to identifying the potential range of reasonable outcomes. 2. Best-case analysis would include the lowest level of anticipated tax rate. 3. For a project with a payback period that exactly equals the project's life, the project NPV is negative. 4. For a normal project, when operating at cash flow breakeven, its IRR is less than the required rate of return. 0000 Statement one (1) is false. Statement two (2) is false. Statement three (3) is false. Statement four (4) is false.
Which of the following statements are false? 1. Scenario analysis is best suited to identifying the potential range of reasonable outcomes. 2. Best-case analysis would include the lowest level of anticipated tax rate. 3. For a project with a payback period that exactly equals the project's life, the project NPV is negative. 4. For a normal project, when operating at cash flow breakeven, its IRR is less than the required rate of return. 0000 Statement one (1) is false. Statement two (2) is false. Statement three (3) is false. Statement four (4) is false.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Which of the following statements are false?
1. Scenario analysis is best suited to identifying the potential range of reasonable outcomes.
2. Best-case analysis would include the lowest level of anticipated tax rate.
3. For a project with a payback period that exactly equals the project's life, the project NPV is negative.
4. For a normal project, when operating at cash flow breakeven, its IRR is less than the required rate of return.
Statement one (1) is false.
Statement two (2) is false.
Statement three (3) is false.
Statement four (4) is false.
Which of the following statements are false?
1. Worst-case analysis would include the highest anticipated cost of capital.
2. A firm that relies heavily on variable costs has a high degree of operating leverage.
3.
4.
The best-case analysis of a proposed project would include the lowest variable cost per unit and highest salvage value.
At the accounting break-even point, the IRR is zero.
Statement one (1) is false.
Statement two (2) is false.
Statement three (3) is false.
Statement four (4) is false.
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