A "what-if" technique that examines how a result will change if the original predicted data are NOT achieved or if an underlying assumption changes is called ________.
A) sensitivity analysis
B) net present value analysis
C) internal rate-of-return analysis
D) adjusted rate-of-return analysis

Question

Quizplus · Accepted Answer

Sensitivity analysis examines the impact of changes in assumptions or predicted data on the results of a decision or project. It involves testing different scenarios to determine how changes in variables affect the outcome. Net present value (B), internal rate-of-return (C), and adjusted rate-of-return (D) analysis are financial analysis techniques that do not specifically deal with the impact of changes in assumptions or predicted data.

A "What-If" Technique That Examines How a Result Will Change