Question

_______ measures the change in NPV that results from given change in an input variable Select...

_______ measures the change in NPV that results from given change in an input variable

Select one:

a. none of the answers are correct

b. monte carlo simulation

c. decision tree analysis

d. scenario analysis

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Homework Answers

Answer #1

Option D is correct. Scnerio Analysis.

Scnerio Analysis is a technique used to test the different scnerios by changing the variables like, Cost of Capital, Like Cash flow under different state of economy i.e. Boom, Recession or Normal economy. There are many more variables which can changed to test the Value of corporation. It is a strategic process of analyzing decisions by considering alternative possible outcomes by changing the relevant varaibles.

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