Sensitivity Analysis Is a "What-If" Technique That Managers Use to Examine

question 161

True/False

Sensitivity analysis is a "what-if" technique that managers use to examine how a result will change if the originally predicted data are NOT achieved or if an underlying assumption changes.

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Definitions:

Non-Controlling Interest

The portion of equity interest in a subsidiary not owned by the parent company, reflecting the minority shareholders' share of the subsidiary's net assets and profits.

Equity Method

An accounting technique used by companies to assess their investments in other companies, recognizing income and changes in investment value proportionate to ownership level.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, presenting it as one single entity.

Consolidation Elimination

The process of removing internal transactions and balances between entities within a single group to prepare consolidated financial statements.