Sensitivity analysis is required because:
A) payoffs and probabilities are estimates.
B) most decisions will affect employees.
C) expected payoffs are sensitive to the time value of money.
D) it is the second step in the decision model.
E) with the passage of time, small decisions get bigger.

Question

Quizplus · Accepted Answer

Sensitivity analysis is required because payoffs and probabilities are estimates, which means there is some degree of uncertainty involved in the decision-making process. Sensitivity analysis helps in determining how changes in these estimates can affect the final decision.

Sensitivity Analysis Is Required Because