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Sensitivity analysis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Sensitivity analysis

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • July 26, 2020 at 10:52 am #578103
    Avatarleo10
    Member
    • Topics: 36
    • Replies: 18
    • ☆☆

    Hi Sir,
    Please could you help me to answer the following, which two statements are correct in sensitivity analysis?

    A) it can be used to gain insight into which assumptions or variables in a situation are critical

    B) it provides info on the basis of which decisions can be made but it doesn’t point to the correct decision directly

    C) As well as identifying how far a variable needs to change, sensitivity analysis looks at the probability of such change

    D) it not only assumes that variables can change independently, it also allows to change more than one variable at a time

    To me it is A B and C…

    Thanks
    Leo

    July 26, 2020 at 4:58 pm #578120
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    C is not correct because although it measures the effect of a change (as in A) it doesn’t tell us how likely it is that there will be a change (i.e. it does not give the probability of it changing).

    July 26, 2020 at 8:36 pm #578134
    Avatarleo10
    Member
    • Topics: 36
    • Replies: 18
    • ☆☆

    Thank you

    July 27, 2020 at 10:10 am #578160
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Sensitivity analysis’ is closed to new replies.

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