Sensitivity analysis

1. What is the benefit of IRS depreciation over uniform depreciation?

2. What causes gains and losses from the disposal of assets?

3. Describe how taxes impact the cash flows generated by the disposal of assets.

4. Why must human judgment be considered in capital budgeting analyses?

1. Why is sensitivity analysis useful in capital budgeting?

2. What constitutes a qualitative factor in a capital budgeting problem?

3. How do balanced scorecard goals impact the capital budgeting decision?

4. If a company projected a negative net present value would it always reject the proposal? Why?

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