Risk analysis in capital budgeting projects differ in risk, and risk analysis is a critical component of the capital budgeting process. consider the case of united recycling inc.: united recycling inc. is one of the largest recyclers of glass and paper products in the united states. the company is looking into expanding into the cardboard recycling business. the company’s cfo has performed a detailed analysis of the proposed expansion. the company’s cfo used sophisticated software to analyze a large number of scenarios and generate estimated rates of return and risk indexes.
based on the information given, determine which of the statements is correct. o
a. the company's cfo conducted a sensitivity analysis to evaluate the project's financial model
b. the company's cfo used a monte carlo simulation to evaluate the project's financial model.
evaluating risk is an important part of the capital budgeting process. which of the following is measured by the variability of the project's expected returns?
a. market, or beta, risk
b. corporate, or within-firm, risk
c. stand-alone risk

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.