Sensitivity analysis of the base-case financial model is a useful tool for which of the following reasons?
A) To determine how long the development process can profitably last
B) To understand how many technical people are needed to make the project a success
C) To help understand the basic trade-offs of resources committed and cash received
D) To identify the necessary product launch date
E) To set marketing and sales budgets

Question

Quizplus · Accepted Answer

Sensitivity analysis helps understand the basic trade-offs of resources committed and cash received by analyzing the impact of changes in key variables on the financial model. It can help determine the most critical variables for the success of the project and identify potential risks and opportunities. It is not directly related to determining the development process's profitable duration, the required number of technical people, identifying the necessary product launch date, or setting marketing and sales budgets.

Sensitivity Analysis of the Base-Case Financial Model Is a Useful