An analysis of what happens to NPV estimates when only one variable is changed is called:
A) Forecasting analysis.
B) Scenario analysis.
C) Sensitivity analysis.
D) Simulation analysis.
E) Break-even analysis.

Question

Quizplus · Accepted Answer

Sensitivity analysis examines how the change in a single input variable affects the Net Present Value (NPV), allowing for the assessment of risk and uncertainty in financial models by isolating the impact of one variable at a time.

An Analysis of What Happens to NPV Estimates When Only