If a Company Wanted to Find the Effect of a Change

question 65

Multiple Choice

If a company wanted to find the effect of a change in the variable cost per unit of production on the net present value of a project, then the company might perform

• A) a sensitivity analysis.
• B) a scenario analysis.
• C) a Monte Carlo simulation.
• D) none of the above.

Analyze the impact of changes in selling price, variable costs, and fixed costs on the contribution margin and break-even points.

Define and calculate the contribution margin ratio and its relevance in CVP analysis.

Understand the effect of changes in sales volume on cost volume profit (CVP) analysis, including changes in sales mix.

Evaluate the effects of adjustments in fixed and variable costs on the break-even point and target profit calculations.

---

Definitions:

Achievement Test

A standardized test designed to measure an individual's level of skill, proficiency, or knowledge in a specific area.

Cultural and Ethnic Samples

Groups of individuals selected for study or analysis based on their shared cultural or ethnic backgrounds.

College Students

Individuals enrolled in an institution of higher education pursuing undergraduate, postgraduate, or similar degrees.

Research

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.