One characteristic of simulation analysis is that:
A) it allows only one variable at a time to change.
B) it limits variation to only a few more likely combinations.
C) many variations are analyzed regardless of their likelihood of occurrence.
D)it identifies the variable that has the greatest effect on a project's value.

Question

Quizplus · Accepted Answer

Simulation analysis typically involves testing a wide range of variations, including less likely scenarios, in order to assess the potential impact of different factors on a project's outcomes. This approach allows for a more comprehensive understanding of the range of possible outcomes, and can help identify potential risks or opportunities that may not be obvious when focusing only on the most likely outcomes. Choices A and B suggest a more limited approach to variation testing, while choice D refers specifically to identifying the most impactful variable rather than exploring a wide range of possibilities.

One Characteristic of Simulation Analysis Is That