10. As a manager is assessing the viability of a project in a capital budgeting, the manager wants to ascertain that how change in one variable changes the NPV of the project. The manager is most likely to use: A. Scenario analysis. B. Sensitivity analysis. C. Monte Carlo simulation. D. Learning curve analysis.

10. As a manager is assessing the viability of a project in a capital budgeting, the manager wants to ascertain that how change in one variable changes the NPV of the project. The manager is most likely to use: A. Scenario analysis. B. Sensitivity analysis. C. Monte Carlo simulation. D. Learning curve analysis.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 1CMA: When compared to static budgets, flexible budgets: a. offer managers a more realistic comparison of...

See similar textbooks

Similar questions

Focusing on improving the activities that are showing significant differences between budgeted and actual results is: A.quantifying plans B.management by exception C.cash management D.creating benchmarks
b) ‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Required: Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems you learned in this module.
Out of the following options please tell me which are two dimensions or the main aspects of budgeting? Incremental and Zero-Base Budget Strategic Plan and Performance Report Static Budget and Flexible Budget Planning and Control Budget Effectiveness and Efficiency
Discuss the following statement: If a firm has only independent projects, a constant WACC,and projects with normal cash flows, the NPV and IRR methods will always lead to identicalcapital budgeting decisions. What does this imply about the choice between IRR and NPV?If each of the assumptions were changed (one by one), how would your answer change?
‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems zero-based and incremental.
Which of the following is NOT true of the budgeting process? Question 8 options: Budgeting provides feedback to management to aid in assessing how well it's reaching its goals. Budgets force managers to plan for the future. Budgets force managers to consider relations among operations across the entire value chain. The performance report is prepared as part of the master budget.
A project team is in the process of developing an approximation of the monetary resources neededto complete project work for a large-scale multinational project. Previous projects of this naturehave been plagued with cost overruns and the Project Manager has decided to take a differentapproach to develop the budget for the current project. He has decided to use the Zero-basedbudgeting approach. A. Critically assess the value of using this approach (Zero-based budgeting), as against otherapproaches, in developing the budget for this project.
Give me a conclusion pargraph as to why budgeting impact managers' behavior
Which of the following procedures does the text say is used most frequently by businesses when they do capital budgeting analyses? a. Monte Carlo simulation uses a computer to generate random sets of inputs, those inputs are then used to determine a trial NPV, and a number of trial NPVs are averaged to find the project's expected NPV. Sensitivity and scenario analyses, on the other hand, require much more information regarding the input variables, including probability distributions and correlations among those variables. This makes it easier to implement a simulation analysis than a scenario or sensitivity analysis, hence simulation is the most frequently used procedure. b. Differential project risk cannot be accounted for by using "risk-adjusted discount rates" because it is highly subjective and difficult to justify. It is better to not risk adjust at all. c. The firm's corporate, or overall, WACC is used to discount all project cash flows to…
"budget performance is a better criterion than past performance for judging managers." Do you agree? Expalin
Which approach requires management to justify all its expenditures? A. bottom-up approach B. zero-based budgeting C. master budgeting D. capital allocation budgeting
Look up the definitions for the following terms: Budget (Budgeting) Capital budget (Capital Budgeting Decisions) Balanced scorecard (Balanced Scorecard and Other Performance Measures) Break-Even point (Cost Volume Profit Analysis) Provide examples of how each of these terms is used in your own life and how using these practices is useful.