Unlike the Cost-Volume-Profit method, the NPV method does not allow users to perform "what-if" sensitivity analysis with respect to various estimates and assumptions, and to examine alternative scenarios.

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Quizplus · Accepted Answer

The statement is not true. The NPV method does allow users to perform sensitivity analysis and evaluate alternative scenarios by changing input parameters and assumptions. Sensitivity analysis involves changing one input at a time to see how it affects the NPV, while scenario analysis involves changing multiple inputs together to create a range of possible outcomes. Both types of analysis can be useful in evaluating the reliability and robustness of an investment project's financial projections.

Unlike the Cost-Volume-Profit Method, the NPV Method Does Not Allow