The Manufacturer of a Brand of Kitchen Knives Is Investigating

question 109

Multiple Choice

The manufacturer of a brand of kitchen knives is investigating the likely effects that an increase in the cost of the raw materials required to make these knives will have on the cost of manufacturing the knives, the selling price of the knives, the number of knives that will then be sold, and the project's net present value (NPV) . Which of the following best describes what type of analysis the manager is performing?

• A) scenario analysis
• B) sensitivity analysis
• C) break-even analysis
• D) EBIT-break even analysis