Which of the following best describes sensitivity analysis?

Question

Quizplus · Accepted Answer

Sensitivity analysis involves testing the results of an investment analysis with varying assumptions in order to evaluate the impact on the investment outcome. This helps to identify key factors that could potentially impact the success of the investment and helps investors make more informed decisions. Setting budgets or analyzing effects on workers' morale are not related to sensitivity analysis, while evaluating different investment options is a broader term that may include sensitivity analysis but is not synonymous with it.

Which of the Following Best Describes Sensitivity Analysis