One of the best ways to speed up the process of financial analysis and arrive at a good decision is to
A)use estimates of inputs when it appears that finding a very accurate input would take an inordinate amount of time.
B)use estimates backed up by sensitivity analysis when it appears that finding a very accurate input would take an inordinate amount of time.
C)use estimates of inputs except when it appears that finding a very accurate input would take an inordinate amount of time.
D)make sure that every detail is very accurate.

Question

Quizplus · Accepted Answer

Using estimates of inputs can save time, but it is also important to consider the potential impact of inaccurate inputs. By using estimates backed up by sensitivity analysis, one can better understand the range of possible outcomes and make a more informed decision. This helps to balance the need for accuracy with the need for efficiency in financial analysis. Option A and C both suggest using estimates, but fail to address the importance of sensitivity analysis. Option D suggests striving for complete accuracy, but this can be time-consuming and may not always be necessary for effective financial analysis.

One of the Best Ways to Speed Up the Process