Ch 8 风险分析与资本预算练习题-solution.docx

Ch 8 Risk analysis Real Option and Capital Budgeting1.Forecasting risk is defined as the possibility that:A.some proposed projects will be rejected.B.some proposed projects will be temporarily delayed.C.Incorrect decisions will be made due to erroneous cash flow projections.D.some projects will be mutually exclusive.E.tax rates could change over the life of a project.2. An analysis of the change in a projects NPV when a single variable is changed is called _ analysis.A. forecastingB. scenarioC. sensitivityD. simulationE. break-even3. Operating leverage is the degree of dependence a firm places on its:A. variable costsB. fixed costsC. salesD. operating cash flowsE. net working capital4. Forecasting risk emphasizes the point that the correctness of any decision to accept or reject a project is highly dependent upon the:A. method of analysis used to make the decision.B. initial cash outflowC. ability to recoup any investment in net working capital.D. accuracy of the projected cash flows.E. length of the project5. Steve, the sales manager for TL Products, wants to sponsor a one-week Customer Appreciation Sale where the firm offers to sell additional units of a product at the lowest price possible without negatively affecting the firms profits. Which one of the following represents the price that should be charged for the additional units during this sale?A. average variable costB. average total costC. average total revenueD. marginal revenueE. marginal cost6. Which of the following values will be equal to zero when a firm is producing the accounting break-even level of output?I. operating cash flowII. internal rate of returnIII. net incomeIV. payback periodA. I onlyB. III onlyC. II and III onlyD. I and IV onlyE. I,II, and III only.7. Webster Iron Works started a new project last year. As it turns out, the project has been operating at its accounting break-even level of output and is now expected to continue at that level over its lifetime. Given this, you know that the project:A. will never pay back.B. has a zero net present valueC. is operating at a higher level than if it were operating at its cash break-evenD. is operating at a higher level than if it were operating at its financial break-even levelE. is lowering the total net income of the firm8. A project has a payback period that exactly equals the projects life. The project is operating at:A. its maximum capacityB. the financial break-even pointC. the cash break-even pointD. the accounting break-even pointE. a zero level of output9. Which of the following statements are identified with financial break-even point?I. The present value of the cash inflows exactly offsets the initial cash outflow.II. The payback period is equal to the life of the project.III. The NPV is zero.IV. The discounted payback period equals the life of the project.A. I and II onlyB. I and III onlyC. II and IV onlyD. I, II, and III onlyE. I, III, and IV only10. Which one of the following characteristics best describes a project that has a low degree of operating leverage?A. high variable costs relative to the fixed costsB. relatively high initial cash outlayC. an OCF that is highly sensitive to the sales quantityD. high level of forecasting riskE. a high depreciation expense11. What is forecasting risk and why is it important to the analysis of capital expenditure projects? What methods can be used to reduce this risk?Answer: Forecasting risk is the possibility that errors in projected cash flows will lead to incorrect decisions. Projects are generally accepted when they have positive NPVs and rejected when they have negative NPVs. If the cash inflows of a project are overestimated, the NPV will be overstated potentially resulting in an incorrect acceptance of the project. On the other hand, if cash inflows are underestimated, a good project might be erroneously rejected. To offset some of this risk, managers should employ sensitivity and scenario analysis as well as break-even analysis to better understand the potential outcomes associated with the project.12. What are the key features of the accounting, cash, and financial break-even points?13. What is operating leverage and why is it important in the analysis of capital expenditure projects?Answer: Operating leverage is the degree to which a project relies on its fixed costs. The more capital intensive a project, the higher the projects DOL. The higher the DOL, the greater the percentage change in the projects operating cash flows relative to a one percent change in the