Project analysis, beyond simply calculating NPV, includes the following procedures:
I.sensitivity analysis;
II.break-even analysis;
III.Monte Carlo simulation;
IV.scenario analysis
A)I only
B)I and II only
C)I, II, and III only
D)I, II, III, and IV

Question

Quizplus · Accepted Answer

Project analysis involves considering various factors that go beyond just calculating NPV. Sensitivity analysis is used to determine how changes in input variables can affect project outcomes, break-even analysis determines the point at which revenues and costs are equal, Monte Carlo simulation involves running simulations based on statistical models to determine project outcomes, and scenario analysis involves evaluating different scenarios to determine how they would affect project outcomes. Therefore, all four procedures (I, II, III, and IV) are important in project analysis.

Project Analysis, Beyond Simply Calculating NPV, Includes the Following Procedures