Describe sensitivity analysis. How has the advent of the electronic spreadsheet affect the use of sensitivity analysis. How has the advent of the electronic spreadsheet affected the use of sensitivity analysis?
Sensitivity analysis is a "what-if" technique that managers use to examine how an outcome will change if the original predicted data are not achieved or if an underlying assumption changes. The advent of the electronic spreadsheet has greatly increased the ability to explore the effect of alternative assumptions at minimal cost. CVP is one of the most widely used software applications in the management accounting area.