Shawn is doing some budgeting for his new start-up business. He has developed a budget in Excel using formulas, as he was taught to do in university. Which of the following statements is true?
A)If Shawn changes one of his assumptions, Excel will automatically recalculate the budget numbers.
B)Shawn would use sensitivity analysis to check the impact of changing his price.
C)Shawn would use roll-up to review his summary numbers.
D)Shawn would use what-if analysis to check the impact of changing his price and the commission he pays his sales people.
E)Shawn would use goal-seeking analysis to examine the impact of changing his forecast of units sold.

Question

Quizplus · Accepted Answer

If Shawn has used formulas in Excel to create his budget, then changing one of his assumptions will result in Excel automatically recalculating the budget numbers. This is the nature of using formulas in Excel. Sensitivity analysis, roll-up, what-if analysis, and goal-seeking analysis are all tools that Shawn could potentially use in addition to creating a budget in Excel. However, none of these options directly relate to the question of what happens when Shawn changes one of his assumptions in the Excel budget.

Shawn Is Doing Some Budgeting for His New Start-Up Business