The analysis of the effects on a project's net present value when only one variable changes is called ______ analysis.
A) Simulation.
B) Upper and lower bound.
C) Scenario.
D) Sensitivity.
E) Break-even.

Question

Quizplus · Accepted Answer

Sensitivity analysis examines how the change in a single input variable affects the project's net present value (NPV), holding all other variables constant. This helps in understanding the robustness of the project's financial viability to changes in key assumptions.

The Analysis of the Effects on a Project's Net Present