Sensitivity analysis is a technique that shows to what extent a change in an investment decision impacts on the break-even point.

Question

Quizplus · Accepted Answer

Sensitivity analysis is a technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions. It is used to predict the outcome of a decision given a certain range of variables. It does not specifically show how changes in an investment decision impact the break-even point, but rather examines how changes in one or more input variables affect the outcome.

Sensitivity Analysis Is a Technique That Shows to What Extent