Beckham created the worksheets above to show the profitability and break-even points for his company. Please refer to the figure above as you answer the questions below.
-To conduct a sensitivity analysis, Beckham can ask: ____.
A) How do the shareholders feel about these changes?
B) How would the break-even point change when the assumptions remain the same?
C) How many units must the company sell to break even?
D) How would the break-even point change if an estimate about one or more other assumptions changes?

Question

Beckham created the worksheets above to show the profitability and break-even points for his company. Please refer to the figure above as you answer the questions below.
-To conduct a sensitivity analysis, Beckham can ask: ____.
A) How do the shareholders feel about these changes? 
B) How would the break-even point change when the assumptions remain the same? 
C) How many units must the company sell to break even? 
D) How would the break-even point change if an estimate about one or more other assumptions changes?

Quizplus · Accepted Answer

Sensitivity analysis involves testing how changing one or more assumptions can impact the break-even point or profitability. Therefore, option D is the correct choice as it specifically asks about the impact of changing an assumption on the break-even point. Option A is not related to sensitivity analysis, while options B and C only ask about the break-even point without mentioning the impact of changing assumptions.

Beckham Created the Worksheets Above to Show the Profitability and Break-Even