Which of the Following Statements Best Describes Simulation Analysis

question 20

Multiple Choice

Which of the following statements best describes simulation analysis?

• A)Simulation analysis involves changing one variable at a time.
• B)Simulation analysis involves changing all relevant variables at the one time.
• C)Simulation analysis requires examination of cash flows under alternate values for the cost of capital.
• D)Simulation analysis involves determining the level of sales or output that determines the break-even point.

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Definitions:

Marginal Analysis

The examination of the costs and benefits of a small (marginal) change in the production of goods or services.

Wheat Farmer

An individual or entity engaged in the cultivation of wheat crops for consumption or sale.

Fertilizer

A chemical or natural substance added to soil to increase its fertility and enhance plant growth.

Marginal Cost

The price of generating an extra unit of a good or service.