Question

Financial planning software packages assist management with ________.

A) assigning responsibility to various levels of management
B) identifying the target customer
C) sensitivity analysis in their planning and budgeting activities
D) achieving greater commitment from lower management

Answer 1

Financial planning software packages aid management in conducting sensitivity analysis, a key function for data-driven decision making in planning and budgeting, which is essential for attracting outside investors.

Step-by-step explanation:

Financial planning software packages assist management with sensitivity analysis in their planning and budgeting activities. These software tools are designed to provide a dynamic environment where managers can test various scenarios and assess the impact of different financial decisions before implementing them. With the increasing availability of data regarding a company’s products, revenues, costs, and profits, the reliance on personal knowledge of individual managers diminishes, and such advanced tools become vital for making informed decisions that appeal to bondholders and shareholders who are willing to provide financial capital to the firm.