Which of the following best describes the term "sensitivity analysis"?
A) It is a testing technique to determine how results would differ if key assumptions are changed.
B) It is an analysis of the emotional sensitivity of a company's employees.
C) It is an evaluation of the accuracy of the assumptions.
D) It evaluates a company's financial condition by doing financial statement analysis.

Question

Quizplus · Accepted Answer

Sensitivity analysis is a technique used to determine how changes in key assumptions or inputs would affect the results or output. It helps in identifying the impact of uncertainty and risk in business decisions. It is commonly used in financial modeling and decision-making, project management, and simulation studies.

Which of the Following Best Describes the Term "Sensitivity Analysis