Which of the following is incorrect:

Multiple Choice

• The basic idea behind sensitivity analysis is to freeze all the variables except one and then see how sensitive the NPV is to changes in that variable.

• Operating cash flow equals fixed costs plus the contribution margin multiplied by the number of units sold.

• A corporations payment of interest on debt is considered a cost of equity.

• In computing the WACC for a firm, you should use the debt-equity ratio at the firms target capital structure.

• When a company makes a public offering it is required to file a registration statement with the SEC.