Which of the Following Are Benefits of What-If Analysis

question 3

Multiple Choice

Which of the following are benefits of what-if analysis?

• A) It pinpoints the sensitive parameters of the model.
• B) It gives the new optimal solution if conditions change.
• C) It tells management what policy decisions to make.
• D) All of the choices are correct.
• E) None of the choices is correct.

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Definitions:

Nonmonetary Asset

Assets that are not convertible directly into a fixed amount of money and do not have a stated monetary value, such as property, equipment, and intellectual property.

Fair Value

The projected cost at which an asset or liability could be swapped between consenting, informed entities in a transaction without any special ties.

Book Value

The net value of an asset as recorded on a company's balance sheet, calculated as the original cost minus depreciation.

Asset Retirement Obligations

Liabilities recognized for the future costs of disposing of an asset and restoring the site, typically relevant for companies with significant fixed assets.