If a 20 Percent Reduction in Forecast Sales Would Not

question 46

Multiple Choice

If a 20 percent reduction in forecast sales would not extinguish a project's profitability, then sensitivity analysis would suggest:

• A)de-emphasizing that variable as a critical factor.
• B)requiring a more detailed sales forecast.
• C)the initial sales forecasts were inflated.
• D)a reallocation of fixed costs to this product.

---

Definitions:

F-distribution

A probability distribution that arises in the analysis of variances across different groups, commonly used in ANOVA testing.

Test Statistic

A value calculated from sample data during a hypothesis test that is used to determine whether to reject the null hypothesis.

ANOVA Table

A statistical table used in analysis of variance that summarizes the data variability within groups and between groups.

Mean Square

A statistic that represents the average of the squares of a set of values, often used in variance and regression analysis.