The financial forecasting and planning model that is becoming increasingly popular because they often provide financial decision makers with more useful information than other models is
A)the deterministic model
B)the probabilistic model
C)the optimization model
D)sensitivity analysis

Question

Quizplus · Accepted Answer

The probabilistic model is better suited for financial forecasting and planning as it takes into account the possibility of multiple outcomes and the likelihood of each outcome. This provides decision makers with a range of possible scenarios and the probability of each scenario occurring, allowing for more informed decisions. The deterministic model assumes a fixed outcome and does not consider variability, while the optimization model focuses on finding the best solution within given constraints and may not provide a comprehensive range of scenarios. Sensitivity analysis is a tool used to determine the impact of changes in input variables on the output of the model, but it does not provide the same level of insight into multiple possible scenarios as the probabilistic model.

The Financial Forecasting and Planning Model That Is Becoming Increasingly