Use the figure for the question(s) below.
-A consumer good company is developing a new brand of organic toothpaste. Above is the sensitivity analysis for this product. The assumptions regarding which parameter should be scrutinized most carefully in the estimation process?
A) units sold
B) sales price
C) cost of goods
D) cost of capital

Question

Use the figure for the question(s) below. 
-A consumer good company is developing a new brand of organic toothpaste. Above is the sensitivity analysis for this product. The assumptions regarding which parameter should be scrutinized most carefully in the estimation process?
A) units sold 
B) sales price 
C) cost of goods 
D) cost of capital

Quizplus · Accepted Answer

The sensitivity analysis demonstrates that the cost of goods is the most sensitive parameter. This means that small changes in the cost of goods can have a significant impact on the overall profitability of the product. Therefore, the company should scrutinize the cost of goods most carefully in the estimation process to ensure that they can make accurate predictions about the profitability of the product.

Use the Figure for the Question(s) Below