QUESTION $41$

a negative cash flow, and we will go broke! How do you respond?

excess of its marginal cost clearly acts to increase operating cash flow.

less than its marginal cost clearly acts to decrease operating cash flow.

QUESTION $42$

negative NPV$.$ Why might the company go ahead with the project? What type of option is most likely to add value to this project?

entirely new market, or with a new product, can give a company name recognition and market share. This may make it more difficult for competitors entering the market.

nationalized and the company could lose its investment.

QUESTION $43$

How does sensitivity analysis interact with scenario analysis?

Sensitivity analysis can determine how the financial break$-$even point changes when some factors $($such as fixed costs, variable costs, or revenue$)$ change.

Sensitivity analysis can determine how the financial profit point changes when some factors $($such as fixed assets, variable costs, or revenue$)$ change.

Sensitivity analysis can determine how the financial break$-$even point changes when some factors $($such as depreciation, variable costs, or total liabilities$)$ change.