Sensitivity analysis measures the stand-alone risk of a project by showing how much the project's NPV is affected by a small change in one of the input variables,such as sales.Other things held constant,with the independent variable graphed on the horizontal axis,the steeper the graph of the relationship line,the more risky the project.

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Sensitivity analysis does measure the stand-alone risk of a project by showing how much the project's NPV is affected by a small change in one of the input variables, such as sales. And, with the independent variable graphed on the horizontal axis, the steeper the graph of the relationship line, the more risky the project.

Sensitivity Analysis Measures the Stand-Alone Risk of a Project by Showing