8 21) Forecasting risk is defined as the possibility that: 3 A) some proposed projects will be rejected. 4 B) some proposed projects will be temporarily delayed. 5 C) incorrect decisions will be made due to erroneous cash flow projections. 6 D) some projects will be mutually exclusive. 7 E) tax rates could change over the life of a project 9 2) Which one of the following will be used in the computation of the best-case analysis of a proposed project? 10 A) Minimal number of units that are expected to be produced and sold 11 B) The lowest expected salvage value that can be obtained for a project's fixed assets 12. C) The most anticipated sales price per unit 13 D) The lowest variable cost per unit that can reasonably be expected 14 E) The highest level of fixed costs that is actually anticipated 15 163) Sensitivity analysis determines the: 17 A) range of possible outcomes given that most variables are reliable only within a stated range. 18 B) degree to which the net present value reacts to changes in a single variable, 19 C) net present value range that can be realized from a proposed project. 20 D) degree to which a project relies on its initial costs 21 E) ideal ratio of variable costs to fixed costs for profit maximization, 22 23 4) By definition, which one of the following must equal zero at the cash break-even point? 24 A) Net present value 25 B) Internal rate of return 26 C) Contribution margin 27 D) Net income 28 El Onerating cash flow