Question

Part – B (SLO 3, 5, 6) Question 2 - Short Theory Questions:

Note: Answer the following questions:

Q. 1. What is sensitivity analysis?

Q.2. What is long range plan?

Please answer these question . I will be thankful for you.

Q.3. What is a capital budgeting?

Answer 1

Q1) Sensitivity analysis determines how the independent variables affect the dependent variables under a set of certain assumptions. This analysis is used to forecast, and make decisions in present on the basis of the forecast. This method is also referred to as what if analysis.

Q2) A long range plan is a set of goals that outlines the path for a company's future. When a long run plan is in place, we need to define a strategic plan to achieve the goals set by long run plan, in order to secure the future of the company and to make it more evident.

Q3) Capital budgeting is a process which uses different techniques to evaluate whether a project should be chosen or an investment should be made in a project . This process helps to make good investments which helps to improve the company's future. For eg:- replacement of a machine, buying a new machine and so on.