Assume You Graph a Project's Net Present Value Given Various

Multiple Choice

Assume you graph a project's net present value given various sales quantities. Which one of the following is correct regarding the resulting function?

A) The steepness of the function relates to the project's degree of operating leverage.
B) The steeper the function, the less sensitive the project is to changes in the sales quantity.
C) The resulting function will be a hyperbole.
D) The resulting function will include only positive values.
E) The slope of the function measures the sensitivity of the net present value to a change in sales quantity.