Which one of the following variables would you suspect to be least significant in a sensitivity analysis of a fast-food establishment?
A) Sales
B) Depreciation
C) Labor cost
D) Food cost

Question

Quizplus · Accepted Answer

Depreciation is a fixed cost that doesn't vary substantially with changes in sales or operational changes in a fast-food establishment. Therefore, it would be the least significant variable in a sensitivity analysis. On the other hand, changes in sales, labor cost, and food cost can significantly impact the profitability of the business.

Which One of the Following Variables Would You Suspect to Be