1. Which of the following is not a change in accounting estimate?
Change in the loss rate on warranty costs.
Change from FIFO to LIFO inventory procedures.
Change in residual value of a depreciable plant asset.
Change from straight-line to sum-of-the-years'-digits method of depreciation.
2. You have estimated the NPV of a project and wish to evaluate the sensitivity of the NPV you have estimated to a change in the cash flows estimated for the project. All else being held equal, if you were to estimate higher future cash flows for the project, would you expect the NPV to:
A. Rise
B. Show no change
C. Fall
D. Either rise or fall