As we are discovering, Cost Benefit Analysis is based on assumptions about financial forecasts of future cash flows and expenses. Since the future is unknown, getting consensus on inputs can often be the most challenging part of running a Cost Benefit Analysis.
We find five colleagues who each have very different views of the future and drawing on your own personal experiences, answer the following questions:
- Why do skilled professionals working in the same business often have significantly different forecasts and views of the future? Share an example from your own work experience where your colleagues had very different forecasts for the same item.
- How can we make better use of data (past performance, industry outlook, etc.) to improve our forecasts and resolve disagreements?
- Would sensitivity analysis have helped Management understand the potential variations driven by changes in assumptions?
PART A – PLEASERESPOND TO CLASSMATE DISCUSSION WHETHER YOU AGREE OR NOT & A DETAILED WHY: In attached document
PART B – PLEASE RESPOND TO CLASSMATE DISCUSSION WHETHER YOU AGREE OR NOT & A DETAILED WHY: In attached document
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