Sensitivity analysis evaluates projects by: o forecasting changes in interest rates that would increase financing costs. O recording NPV changes while changing one variable at a time. o insuring that the project sponsor has proper incentives. O testing for interrelated variables. QUESTION 2 Which of the following descriptions is representative of scenario analysis? o One variable at a time is allowed to change. It isolates the unknowns that belong in the model. Different combinations of variables are analyzed. o It represents the "top-down" approach. QUESTION 3 Calculate the economic break-even level of sales for a project requiring an investment of $3,000,000 and cash flows =(.15)(sales)-$250,000 in years 1 and 2. Assume the discount rate is 10%. O $3,254,890 o$ 3,504,890 o$ 4,921,549 o $13,190,476