Conducting a(n)________ on cash flow involves assigning a + or − probability to the estimated value.
A) break-even analysis
B) audit
C) distribution analysis
D) sensitivity analysis

Question

Quizplus · Accepted Answer

Conducting a sensitivity analysis on cash flow involves assigning a probability (positive or negative) to the estimated cash flow, and then analyzing the potential impact on overall financial performance based on different scenarios. This type of analysis helps businesses to identify potential risk factors and plan accordingly to minimize their impact on cash flow. Break-even analysis, audit, and distribution analysis are all important financial tools, but they do not involve assigning probabilities to cash flow estimates.

Conducting A(n)________ on Cash Flow Involves Assigning a + or −