Reading 27: Capital Budgeting-LOS d 习题精选

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2^#

发表于 2010-4-15 11:50 | 只看该作者

Which of the following statements about risk analysis techniques is least accurate?

A)	Sensitivity analysis is incomplete, because it fails to consider the probability distributions of the independent variables.

B)	In sensitivity analysis, the dependent variable is plotted on the y-axis and the independent variable on the x-axis. The steeper the slope on the resulting line the less sensitive the dependent variable is to changes in the independent variable.

C)	Scenario analysis is a risk analysis technique that considers both the sensitivity of the dependent variable to changes in the independent variables and the range of likely values of these variables.

In sensitivity analysis, the dependent variable is plotted on the y-axis and the independent variable on the x-axis. The steeper the slope on the resulting line the more sensitive the dependent variable is to changes in the independent variable.

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发表于 2010-4-15 11:51 | 只看该作者

Which of the following statements about Monte Carlo simulation is FALSE? Monte Carlo simulation:

A)	is the most accurate risk analysis tool because it is based on real data.

B)	can be useful for estimating the stand-alone risk of a project.

C)	is capable of using probability distributions for variables as input data.

Monte Carlo uses computer simulated data not real data to estimate risk. It can be a very useful tool when there is a very small sample size for analysis.

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4^#

发表于 2010-4-15 11:51 | 只看该作者

Which of the following statements about sensitivity analysis is least accurate?

A)	The steeper the slope of the NPV versus the variable, the more sensitive the output variable is to a change in the input variable.

B)	Sensitivity analysis alters a single independent variable to determine the impact on the output variable.

C)	Sensitivity analysis starts with the best-case scenario.

In sensitivity analysis, you start with the “base-case” scenario. In this case, you use the company's projected cash flows as the inputs to calculate the net present value (NPV) of a project. Hopefully, supporters of a project are providing realistic information, although it may be on the optimistic side. In a “best-case” scenario, revenues would be excessively high, while expenses would be excessively low.

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发表于 2010-4-15 11:51 | 只看该作者

Which of the following simulation techniques computes as many as 1,000 net present values, based on multiple values for each cash flow?

A)	Monte Carlo simulation.

B)	Sensitivity analysis.

C)	Scenario analysis.

Through the computation of multiple net present values, Monte Carlo simulation provides insight to the possible distribution of net present values arising from a project. Scenario analysis, on the other hand focuses on the worst case, best case, and base case. Sensitivity analysis inputs could be modified 1,000 times, but typically only one variable is changed at a time from the base case scenario.

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发表于 2010-4-15 11:51 | 只看该作者

Define sensitivity analysis and Monte Carlo simulation.

Sensitivity analysis is: Monte Carlo simulation

when a firm looks at the sensitivity of only one variable, holding all others constant.

uses historical values from which repeated samples are drawn.

when a firm looks at the sensitivity of many variables, holding some constant.

assumes a specified distribution to generate random samples in order to estimate true distribution parameters.

when a firm looks at the sensitivity of only one variable, holding all others constant.

assumes a specified distribution to generate random samples in order to estimate true distribution parameters.

Monte Carlo simulation assumes a specified distribution to generate random samples in order to estimate true distribution parameters.

When a firm looks at the sensitivity of only one variable, holding all others constant, they are performing sensitivity analysis.