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In a Sensitivity Graph That Examines the Present Worth of a Project

Question 20

Multiple Choice

In a sensitivity graph that examines the present worth of a project, the slope of a line shows


A) how sensitive a project's benefit-cost ratio is to changes in its inputs: the steeper, the more sensitive.
B) how sensitive a project's PW is to changes in its inputs: the steeper, the more sensitive.
C) how sensitive a project's benefit-cost ratio is to changes in its inputs: the flatter, the more sensitive.
D) how sensitive a project's PW is to changes in its inputs: the flatter, the more sensitive.
E) how sensitive the project's IRR is to changes in its inputs: the flatter, the more sensitive.

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