Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) Straightforward sensitivity analysis, as it is generally employed, is incomplete in that it fails to consider the range of likely values for the key input variables and the probabilities of different input values.
• B) A statistically based behavioural approach to project analysis that applies pre-determined probability distributions is the scenario approach.
• C) A method for evaluating a project that uses a number of possible values for a given variable, such as cash inflows, to assess its impact on the firm's return is simulation analysis.
• D) Sensitivity analysis is a type of risk analysis that considers both the sensitivity of NPV to changes in key variables and the likely range of variable values.

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Definitions:

W. Edward Deming

An American engineer, statistician, and management consultant known for his work in the field of quality management and his contribution to Japan's industrial recovery post-World War II.

Organizational Learning

The process through which an organization acquires, develops, and transfers knowledge, skills, and values, improving its effectiveness over time.

David A. Garvin

A renowned academic and author known for his contributions to the fields of business management and quality management.

Boundary-Spanning Subsystem

Part of an organization that interacts with the external environment, facilitating the input and output transactions between the organization and its external stakeholders.