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An analysis of what happens to the estimate of a project’s net present value when you...

An analysis of what happens to the estimate of a project’s net present value when you examine a vast number of different likely economic situations is called _____ analysis. Select one: a. forecasting b. scenario c. sensitivity d. simulation e. break-even

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Answer #1

Option "B" is correct.

Forecasting is the process of making predictions of the future based on past and present data and most commonly by analysis of trends.

Sensitivity Analysis is a tool used in financial modeling to analyze how the different values of a set of independent variables affect a specific dependent variable under certain specific conditions.

Simulation analysis is implemented for preparing a probability profile regarding a criterion of merit by stochastically aggregating the variable values that are associated with the opted criterion.

A break-even analysis is a useful tool for determining at what point your company, or a new product or service, will be profitable.

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