Sensitivity Analysis of the Base-Case Financial Model Is a Useful

question 33

Multiple Choice

Sensitivity analysis of the base-case financial model is a useful tool for which of the following reasons?

• A) To determine how long the development process can profitably last
• B) To understand how many technical people are needed to make the project a success
• C) To help understand the basic trade-offs of resources committed and cash received
• D) To identify the necessary product launch date
• E) To set marketing and sales budgets

---

Definitions:

Indirect

Referring to a relationship or communication where the effect or message is not directly conveyed, but rather inferred through other means.

Statistical Significance

See Significance level.

Degrees of Freedom

The quantity of autonomous numbers or measures that can be allocated to a statistical distribution while still adhering to all restrictions.

Sample Size

The number of observations or elements drawn from a larger population for the purpose of statistical analysis.