To determine the degree to which the projected net present value of a project is dependent upon a single variable you should conduct _____ analysis.
A) Sensitivity.
B) Scenario.
C) Accounting break-even.
D) Financial break-even.
E) Cash break-even.

Question

Quizplus · Accepted Answer

Sensitivity analysis is used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions. This analysis is particularly useful in assessing the risk associated with a specific variable on the projected net present value of a project.

To Determine the Degree to Which the Projected Net Present