If a 20 Percent Reduction in Forecast Sales Would Not

question 101

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

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Definitions:

Financial Accounting

The branch of accounting focused on the summary, analysis, and reporting of financial transactions pertaining to a business, resulting in the preparation of financial statements.