Correct Answer:
C. How changes in one input variable affect the project's NPV
It tests how sensitive the result is to changes in key assumptions.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
Sensitivity analysis in capital budgeting examines:
Related MCQs
A contingency fund is:
A.
A fund kept to meet urgent unforeseen expenditure
B.
A fund for planned salaries
C.
A fund for repayment of loans only
D.
A private fund of officers
Correct answer is:
A. A fund kept to meet urgent unforeseen expenditure
Do you agree with this answer?
Actual sales are Rs. 500,000 and break-even sales are Rs. 350,000. The margin of safety is:
A.
Rs. 850,000
B.
Rs. 350,000
C.
Rs. 150,000
D.
Rs. 30,000
Correct answer is:
C. Rs. 150,000
Do you agree with this answer?
Audit sampling means applying audit procedures to:
A.
Every item in the population
B.
Only the largest item in the population
C.
Less than 100% of items in a population so that all sampling units have a chance of selection
D.
Items chosen by management
Correct answer is:
C. Less than 100% of items in a population so that all sampling units have a chance of selection
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A major limitation of the payback period method is that it:
A.
Is too complicated to calculate
B.
Uses discounted cash flows
C.
Ignores the time value of money and cash flows after the payback period
D.
Considers all cash flows over the project life
Correct answer is:
C. Ignores the time value of money and cash flows after the payback period
Do you agree with this answer?
The National Finance Commission (NFC) is constituted under:
A.
Article 90 of the Constitution
B.
Article 140 of the Constitution
C.
Article 175 of the Constitution
D.
Article 160 of the Constitution
Correct answer is:
D. Article 160 of the Constitution
Do you agree with this answer?
Performance audit in the public sector is concerned with:
A.
Only the accuracy of cash books
B.
Only legal compliance
C.
Only tax collection
D.
Economy, efficiency and effectiveness of government programs
Correct answer is:
D. Economy, efficiency and effectiveness of government programs
Do you agree with this answer?
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