State the disadvantages of sensitivity analysis.

      

State the disadvantages of sensitivity analysis.

  

Answers


Kavungya
1. It does not provide clear cut results. The terms optimistic and pessimistic could mean different
things to different people.
2. It fails to focus on the interrelationship between underlying variables. For example sales
volume may be related to price and cost but we analyze each variable differently.
Kavungya answered the question on April 13, 2021 at 09:28


Next: Outline the steps followed in use of sensitivity analysis.
Previous: State the advantages of sensitivity analysis.

View More CPA Financial Management Questions and Answers | Return to Questions Index


Exams With Marking Schemes

Related Questions