Exam (elaborations)
BADM 710 - Chapter 7 Questions with Explanations of Answers | latest upate 2024
- Course
- Institution
BADM 710 - Chapter 7 Questions with Explanations of Answers | latest upate 2024
[Show more]
Seller
Follow
ACTUALSTUDY
Reviews received
Content preview
BADM 710 - Chapter 7Sensitivity Analysis - ANS-- Analysis of the effects on project profitability of changes in sales,
costs, etc.
- This can help to compute NPV under various forecasts under individual inputs, this helps tell
us which variables are critical to NPV and how sensitive the NPV is
- Also called: Best, Optimistic, Pessimist analysis (BOP analysis)
CONS:
-How do you consistently define pessimistic, and optimistic?
-Managers could have an optimistic view of a pessimistic forecast
-Looks at only one variable at a time when in reality one bad variable could affect other
variables negatively
Variable Costs - ANS-- A cost that varies directly with volume and is zero when production is
zero
Fixed Costs - ANS-- A cost that is not dependent on the amount of goods or services produced
during the period
Scenario Analysis - ANS-- Analysis given a particular combination of assumptions
- Analysis of the effect on a project of different scenarios with each scenario involving many
variable changes
Break-even Analysis - ANS-- Analysis of the level of sales at which a project would earn zero
profit/break-even
Contribution Margin - ANS-- Amount that each additional sale contributes to the profit of the
whole project
- Price - Variable Cost = Contribution Margin
Monte Carlo Simulation - ANS-- Estimation of the probabilities of different possible outcomes
- An exercise that generates possible outcomes for a project based on a model of the underlying
factors that drive project performance
- This is an extension of a scenario analysis
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ACTUALSTUDY. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
85169 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now