The use of sensitivity analysis requires that
A)a model of a project's cash flows be developed
B)probability distributions of the determinants of a project's cash flows be estimated
C)the firms have access to a very large computer
D)the firm is greatly interested in the portfolio risk reduction characteristics of a project

Question

Quizplus · Accepted Answer

Sensitivity analysis involves developing a model of a project's cash flows to assess how changes in key variables affect the project's outcomes.

The Use of Sensitivity Analysis Requires That