A key type of sensitivity analysis for managers is to play "what-if" with the cash budget so as to anticipate outcomes and take steps to minimize the effects of shortfalls in cash balances.

Question

Quizplus · Accepted Answer

Sensitivity analysis involves examining how changes in different variables can impact the outcome of a given situation. In the case of cash budgeting, playing "what-if" scenarios can help managers anticipate possible shortfalls in cash balances and take steps to prevent or mitigate their effects. This is an important tool for effective cash management and financial planning.

A Key Type of Sensitivity Analysis for Managers Is to Play