Which analysis involves assessing the effect of changes or errors in the estimated variables on the NPV of a project?
A)Simulation analysis.
B)Project analysis.
C)Sensitivity analysis.
D)Break-even analysis.

Question

Quizplus · Accepted Answer

Sensitivity analysis involves assessing the effect of changes or errors in the estimated variables on the NPV of a project. This analysis identifies the variables that have the most significant impact on project profitability and helps to make more informed decisions by providing a range of possible outcomes based on different scenarios. Therefore, sensitivity analysis is the best choice for this question.

Which Analysis Involves Assessing the Effect of Changes or Errors