An analysis of what happens to the estimate of net present value when only one variable is changed is called _____ analysis.
A) forecasting
B) scenario
C) sensitivity
D) simulation
E) break-even

Question

Quizplus · Accepted Answer

Sensitivity analysis involves changing only one variable while keeping all other variables constant in order to see the effect of that change on the estimated net present value. It is a common tool used in financial analysis to determine which variables have the greatest impact on the outcome of a project or investment.

An Analysis of What Happens to the Estimate of Net