The best definition of sensitivity analysis is:
Multiple Choice
The possibility that errors in projected cash flows lead to incorrect decisions.
The determination of what happens to NPV estimates when we ask what-if questions.
A combination of scenario and sensitivity analyses.
A combination of statistical and probabilistic analysis.
Investigation of what happens to NPV when only one variable is changed.
The best definition of sensitivity analysis is the determination of what happens to NPV estimates when we ask what if questions
> Sensitivity analysis is the analysis of target variables with respect to the final outcome
> for example: in case of NPV calculation the varibales are given NPV will be calculated with given variables range and the final outcome sensitivity will be calculated with respect to variables
> This is also called as what if analysis or simulation model
Get Answers For Free
Most questions answered within 1 hours.