If Sensitivity Analysis Concludes That the Largest Impact on Profits

question 105

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:

Social Responsibility

The obligation of a business to have a positive effect on society on four levels—economic, legal, ethical, and philanthropic.

Business's Obligation

The responsibilities and commitments a business has, including legal, financial, and ethical duties to its stakeholders.

Community

A group of people living in the same place or having a particular characteristic in common, often sharing a sense of belonging or community spirit.

Control Systems

The means to monitor input, transformation, and output so as to identify problems.