-Refer to the Information in the Previous Question

Multiple Choice

$\begin{array} { lr } \text{Tatal sales revenue}&\text { \$ 10,000,000 } \\ \text{Less: Develapment cost}&\text { 6,000,000 } \\ \text{Less: Land asking price}& \underline{1,000,000} \\\text{Patential gross profit}&\$ 3,000,000 \\ \text{Less: Admin., legal, commissians, etc.}&\underline{1,500,000} \\ \text{Patential net profit}&\underline{\$ 1,500,000} \\ \end{array}$
-Refer to the information in the previous question. You have been advised that sales revenues may be 10 percent lower and/or development costs may be 10 percent higher. Performing a sensitivity analysis, you conclude:

A) A 10 percent decrease in sales revenues would have a bigger impact on returns than a 10 percent increase in development costs
B) A 10 percent increase in development costs would have a bigger impact on returns than a 10 percent decrease in sales revenues
C) A 10 percent increase in development costs and a 10 percent decrease in sales revenues would have opposite impacts on returns, canceling each other out and having no impact on returns
D) Both factors would have such a small impact, that there is no reason to be concerned about either a 10 percent increase in development costs or a 10 percent decrease in sales revenues