If Sensitivity Analysis Concludes That the Largest Impact on Profits

question 26

Multiple Choice

If sensitivity analysis concludes that the largest impact on profits would come from changes in the sales level,then:

• A) fixed costs should be traded for variable costs.
• B) variable costs should be traded for fixed costs.
• C) the project should not be undertaken.
• D) additional marketing analysis may be beneficial before proceeding.

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Definitions:

Esophagitis

Inflammation of the esophagus, which can cause pain, difficulty swallowing, and other discomforts.

Duodenal Ulcer

A type of peptic ulcer that occurs in the upper part of the small intestine, known as the duodenum.

Mastication

The method of chewing on food to facilitate swallowing and the digestion process.

Surface Area

The total area that the surface of an object occupies, relevant in various biological, physical, and chemical phenomena due to its influence on rates of reactions.