August 22, 2013
Chapter 11 – Break-Even, Sensitivity, and Risk Analysis
Sample Responses to Discussion Questions
1) Is the risk experienced by BP limited to financial risk? If not, what other risks are present?
2) Is the exposure to risk at BP limited to their shareholders and employees? If not, who else is at risk?
3) What are some specific steps that BP can take to limit their risks?
4) How might sensitivity analysis be used to mitigate the risk faced by BP?
5) Given the complex investment decisions made by a company such as BP, is an economic break-even
analysis sufficient to make decisions? If not, what other factors might need to be considered and
how might this be done?