In a sensitivity analysis, managers should change ________ variable(s)at a time to determine how sensitive the_______ _ value of the investment is to the different variables used in the calculations.
A)all; future
B)one; present
C)one; future
D)all; present

Question

Quizplus · Accepted Answer

In a sensitivity analysis, managers should change only one variable at a time to determine how sensitive the present value of the investment is to the different variables used in the calculations. This allows them to isolate the impact of each individual variable on the investment's value. Changing all variables at once would make it difficult to determine which variable is having the most significant impact on the investment's value. Changing only future variables would not provide a clear indication of the impact of current variables on the investment's value.

In a Sensitivity Analysis, Managers Should Change ________ Variable(s)at a Time