7. Project risk refers to the variability in a project\'s NPW True/ False 8. If

Question

7. Project risk refers to the variability in a project's NPW True/ False 8. If any equipment is well maintained during its economic life, O8M not increase as the equipment ages. costs generally do True / False 9. Equity financing involved capital coming from either government programs or func raised from an issuance of stock. True/False Sensitivity Analysis reveals which factors can have the greatest impacts and therefore explains any interaction among variables 10 True / False Cost of Equity is the minimum rate of return a firm must offer its investm bankers as compensate for loaning the company money 11 True / False

Explanation / Answer

Answers:

7) False, Project Risk refers to the the various risks related to Net present Value (NPV), underwriter related risk etc.

8) True, proper maintainence of machine shall keep a check on the operating and maintainence charges of the machine from increasing as time passes.

9) False, Project financing refers to the capital received in the form of government grants, issuance of stock, common stock etc.

10) True, sensitivity analysis deals with the factors having gratest impact.

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