Genevieve has developed a computer software program that analyzes potential project outcomes. The software randomly assigns a value to each of the variables, such as sales quantity and variable cost per unit, and generates the resulting net present value for the project. This process is repeated hundreds of times with each variable always being assigned a random value within a given range of possible values. The software then produces a graph depicting the net present values that were generated. By using this software, Genevieve is conducting _____ analysis.
A) Sensitivity.
B) Scenario.
C) Simulation.
D) Financial break-even.
E) Cash break-even.

Question

Quizplus · Accepted Answer

Genevieve is conducting simulation analysis, as the software repeatedly assigns random values to variables within a given range and generates outcomes (net present values), which is characteristic of simulation analysis.

Genevieve Has Developed a Computer Software Program That Analyzes Potential