When firms prepare a financial plan,they use the following:
I.Monte Carlo simulations;
II.sensitivity analysis;
III.scenario analysis;

Question

Quizplus · Accepted Answer

When firms prepare a financial plan, they use Monte Carlo simulations, sensitivity analysis, and scenario analysis. Monte Carlo simulations use random variables to simulate different outcomes and the probabilities of those outcomes. Sensitivity analysis involves changing one variable at a time to see how it affects the overall financial plan. Scenario analysis involves developing different scenarios and analyzing how they would impact the financial plan. Therefore, option C, I, II, and III, is the correct choice.

When Firms Prepare a Financial Plan,they Use the Following