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:

Not-Invented-Here Bias

The tendency to ignore or harbor negative attitudes toward ideas from outside one’s own organization or project team.

Implement

To put into action or execute a plan, process, or instruction.

Expected Value

A statistical concept that calculates the anticipated value of an investment, decision, or outcome over time, considering all possible scenarios.

Duplication

The act of copying or reproducing something. In an organizational context, it could refer to redundant processes or systems that may lead to inefficiency.