US CMA Part 1 · Chapter 2 · Question 27 of 30
A financial planning model is used to show how budgeted operating income would change if the selling price fell by 5% while all other inputs stayed the same. This technique is known as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Sensitivity (what-if) analysis
Explanation
Sensitivity analysis changes one input at a time to see its effect on the outcome, helping managers identify the variables to which the plan is most sensitive. Monte Carlo simulation varies many inputs at once using probability distributions.
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