A new bridge project passed the feasibility study test, and is now in the planning stage. The project manager thinks that evaluation of people's willingness to pay for the use of the bridge was done under the assumption of low inflation. In this regard, at this stage the project manager should
A)initiate a public hearing.
B)perform sensitivity analysis with respect to variable levels of inflation.
C)terminate the project.
D)move on to the execution stage.
E)perform hedonic price evaluation.

Question

Quizplus · Accepted Answer

Performing sensitivity analysis with respect to variable levels of inflation allows the project manager to understand how changes in inflation could impact people's willingness to pay for the use of the bridge, ensuring that the project's financial assumptions are robust under different economic conditions.

A New Bridge Project Passed the Feasibility Study Test, and Is