1.What is sensitivity analys 2. What is long range plan? 3. What is a capital budgeting?
Q) A)
1.What is sensitivity analys
2. What is long range plan?
3. What is a capital budgeting?
Define Sensitivity analysis
Sensitivity analysis is a tool to examine the values of an independent variable that affects a particular dependent variable under a given set of assumptions
In cost management accounting, the sensitivity analysis is used to evaluate the risk of the project or decision. If there is any uncertainty, then it could be dealt with by altering projections to realize how sensitive the decision is to errors in estimates.
Define the Long range-plan.
A long term plan (LRP) is a strategic financial plan that is long-term in nature, typically covering three to five years. The LRP ensures the financial outputs of the organization match the strategic goals. The prediction of clinical and development costs in the upcoming five years is challenging. Therefore, LRP uses high-level, standard cost assumptions based on historical data, experience, and objective sources. An LRP also assesses the critical inflection points and the associated hires, financings, and business development deals. The LRP can assess best-case, worst-case, and base-case scenarios and the associated financial impact.
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