Sensitivity Analysis Is a Statistics-Based Approach Used in Capital Budgeting

question 12

True/False

Sensitivity analysis is a statistics-based approach used in capital budgeting to asses risk by applying predetermined probability distributions and random numbers to estimate risky outcomes.

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Definitions:

Indirect Compensation

Benefits provided to employees that are not included in direct salary or wages, such as health insurance, retirement plans, and paid time off.

On-site Daycare/Eldercare

Facilities provided by employers or institutions at the workplace to care for employees' children or elderly dependents during working hours.

Childless/Parentless Employees

Workers who do not have children or living parents, which can influence their benefits needs or workplace accommodations.

Portable Benefits

Benefits that can be retained by employees even when they change employers, promoting flexibility and job mobility.