Analysis indicates that a project's level of success is primarily dependent upon the firm controlling the variable costs.What type of analysis was conducted?
A) Sensitivity analysis
B) Break-even analysis
C) Ratio analysis
D) Real option analysis

Question

Quizplus · Accepted Answer

Sensitivity analysis is a type of analysis that examines how changes in a single variable can impact project outcomes. In this scenario, the analysis focused on the variable costs and determined that they are the most important factor in determining a project's success. This suggests that the analysis conducted was a sensitivity analysis, which examined the sensitivity of project outcomes to changes in one specific variable. Break-even analysis, ratio analysis, and real option analysis do not typically evaluate the impact of single variables on project success in the same way as sensitivity analysis.

Analysis Indicates That a Project's Level of Success Is Primarily