In a situation where FAR Corporation cannot secure replacement suppliers for chocolate, which variable is critical for sensitivity analysis?

In the scenario where FAR Corporation is unable to secure replacement suppliers for chocolate, the most critical variable for sensitivity analysis would be the projected sales growth rates. This is because sales growth directly influences revenue and cash flow, which in turn affects the overall financial health of the company.

When suppliers are limited, the company may face constraints on supply, potentially leading to increased prices or a decrease in product availability. An increase in projected sales growth rates indicates a higher demand for the product, which can put further pressure on the already limited supply chain. Understanding how varying sales growth rates would affect the company's financial performance is essential in this context.

Sensitivity analysis helps in understanding how changes in key variables influence outcomes, making it essential to evaluate how optimistic or pessimistic projections regarding sales growth could impact profits, cash flow, and strategic planning, particularly in a crisis situation like the one described. This analysis enables the company to better prepare for variations in market conditions and make informed decisions about supplier relationships and inventory management.