Which of the following appears to be a more likely result from using sensitivity analysis?
A)agreement on the appropriate discount rate.
B)determine whether to finance with debt or equity.
C)isolation of pivotal factor in project profitability.
D)select the best capital budgeting project.

Question

Quizplus · Accepted Answer

Sensitivity analysis is used to identify the individual variables that have the most significant impact on a project's profitability. Therefore, the isolation of the pivotal factor in project profitability is the most likely result of sensitivity analysis. The other options, such as determining financing structure, selecting the best capital budgeting project, and agreement on appropriate discount rate, are more complex decisions that require more detailed analysis beyond the scope of sensitivity analysis.

Which of the Following Appears to Be a More Likely