what does the sensitivity analysis look like?

Q: Outline the weaknesses of sensitivity analysis

A: Sensitivity analysis uses in capital budgeting for measuring the risk in project. It helps in…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: When is Attribute sampling used?

A: Attributes sampling is a statistical sampling method used to estimate the rate of control procedure…

Q: What are risk assessments?

A: Risk assessment means identification of risk faced by a business organization that hampers it from…

Q: How does the decision-maker use the scenario analysis?

A: Scenario analysis helps investors and analysts in making better decisions.

Q: Describe the Sensitivity Analysis for Mutually Exclusive Alternatives?

A: Sensitivity analysis portrays how various values of an independent factor under a given arrangement…

Q: What is Sampling Risk?

A:

Q: Describe the method for conducting sensitivity analysis for mutually exclusive alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: Why do we need stress testing and scenario analysis?

A: A stress test or scenario analysis is used to determine and analysis the outcome of a financial…

Q: What is a key performance indicator?

A: Key Performance Indicator: Key performance indicator is the measurement metric used to evaluate the…

Q: What techniques can be used to analyze real options?

A: A choice accessible to the organization's managers related to the investment opportunities is known…

Q: What is indifference curve?

A: Indifference curve: It is a diagram indicating a mix of two items that give equivalent fulfillment…

Q: What are the appealing qualities of Payback Screening?

A: The payback method is the simplest way of checking the viability of the project. The payback method…

Q: What is Non-Sampling Risk?

A: Sampling: It is a procedure used by the auditor to analyze the predetermined number of observations…

Q: What is Monte Carlo simulation analysis?

A: Answer: Monte Carlo simulation is the methodology used to consider the financial, cost, and project…

Q: is profile measurement and analysis? What are the limitations of this approach?

A:

Q: How has the advent of the electronic spreadsheet affected the use of sensitivity analysis?

A: Sensitivity analysis:

Q: How efficient is an High-low method technique?

A: Using high low method, different types of costs can be separated.

Q: What are the two primary factors that are difficult to estimate in sensitivity analysis?

A: Answer: Sensitivity analysis is commonly used in determining the interactions in a system or even a…

Q: What is the heart of ERP system?

A: Given: It is necessary to inquire about the element at the core of the ERP.

Q: How is sampling risk controlled?

A: Sampling: Sampling allows an individual obtain the information about the population of interest in…

Q: What is the efficient frontier?

A: The term efficient frontier is used in relation to professor Harry Markowitz's Modern Portfolio…

Q: What are the advantages and disadvantages of using MUS? Under what conditions is it best used?

A:

Q: How does Sampling Risk compare to Non-Sampling Risk?

A: Risk:   It is a probability of the financial statements being materially incorrect even though the…

Q: Describe the relationship between Simulation analysis, Scenario analysis and Sensitivity analysis –…

A: Sensitivity Analysis refers to an assessment of the impact of the changes in one variable on the NPV…

Q: When we perform sensitivity analysis for mutually exclusive alternatives, itmay be more effective to…

A: Net present worth is acknowledged as the current worth or value of a project which is adjusted as…

Q: What is the payback screening?

A: Payback method: Payback period is the expected time period which is required to recover the cost of…

Q: What kinds of controls are the most difficult to show in a balanced scorecard?

A: The balanced scorecard is a too for measuring the performance.

Q: What is the DCF method?

A: DCF is a complex tool for valuation which approximates the value of any investment depending upon…

Q: What is the Baumol model, and how is it used?

A: The Baumol model, also known as the Baumol-Allais-Tobin (BAT) model, is a cash management model. In…

Q: What is sensitive analysis?

A: Sensitive analysis is a method for predicting the outcome of a decision if a situation turns…

Q: What is sequential sampling? What are its advantages and disadvantages?

A: In this type of sampling, sequence of sample is taken from a group.In this method of sampling,…

Q: What factors affect sample size?

A: Definition:   Sampling: Sampling allows an individual to obtain information about the population of…

Q: What is the general goal of trend analysis?

A: Trend analysis:   Trend analysis is prepared to make comparison between the previous year's…

Q: What are the two stages in risk assessment?

A: Risk assessment is the process which involves analysis & identification of events that can have…

Q: What differential analysis and why would we use it?

A: Decision making is the process of taking the decisions based on the costs and different kind of…

Q: How can thepayback method be useful?

A: Meaning:   The payback period is the time required to earn back the amount invested in a…

Q: What advantage does scenario analysis have over sensitivityanalysis?

A: In finance, we are required to analyze the change in value of one variable over the change in the…

Q: What is Discovery Sampling?

A: Discovery sampling can be used by the audit team as follows: Go to the AICPA sampling tables…