Which of the following statements is CORRECT?
A. Sensitivity analysis as it is generally employed is incomplete in that it fails to consider the probability of occurrence of the key input variables.
B. In comparing two projects using sensitivity analysis, the one with the steeper lines would be considered less risky, because a small error in estimating a variable such as unit sales would produce only a small error in the project's NPV.
C. The primary advantage of simulation analysis over scenario analysis is that scenario analysis requires a relatively powerful computer, coupled with an efficient financial planning software package, whereas simulation analysis can be done efficiently using a PC with a spreadsheet program or even with just a calculator.
D. Sensitivity analysis is a type of risk analysis that considers both the sensitivity of NPV to changes in key input variables and the probability of occurrence of these variables' values.
E. As computer technology advances, simulation analysis becomes increasingly obsolete and thus less likely to be used than sensitivity analysis.
Answer: A
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Harvard Professor Lynn Paine proposed a “moral compass” through which managers can explore the moral dimensions of their own decisions. Which of the following statements is a “lens” included in the moral compass framework?
A. Is this decision fair to all stakeholders in the organization? B. Is the action worthwhile? C. How did the organization react to similar cases in the past? D. Do you have self-interest that might compromise your judgment?
Differentiate internal and external recruiting.
What will be an ideal response?
________ variability in revenues and a/an ________ operating margin mean higher business risk
A) Greater; increasing B) Lesser; declining C) Greater; declining D) None of the above.
Which of the following statements is true?
A. Learners are generally more satisfied with online instruction relative to classroom instruction. B. Classroom instruction is more effective than online instruction for teaching declarative knowledge. C. Online instruction has been found to be effective for all learners. D. Online instruction and classroom instruction are equally effective when similar instructional methods are used.