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:

Aromatic

Refers to organic compounds that contain one or more planar rings of atoms with delocalized pi electrons, exhibiting special stability.

Antiaromatic

Antiaromaticity describes molecules that fail to comply with Huckel's rule, having conjugated pi systems with 4n π electrons that lead to destabilization.

Nonaromatic

Referring to organic compounds that do not have the aromatic stability associated with the delocalized pi electrons in a ring structure.

Aromatic Heterocycles

Rings of carbon atoms containing at least one non-carbon atom (heteroatom) like nitrogen, oxygen, or sulfur, that are stable due to aromaticity, important in many biological molecules and synthetic compounds.