Sensitivity analysis of a project is conducted by

Question

Quizplus · Accepted Answer

Sensitivity analysis involves changing the value of a single variable and observing the resulting change in the net present value. This helps identify the most important variables in the project and the effect of changes in them on project outcomes. Option B involves changing two variables, which is a more complex analysis and not specifically related to sensitivity analysis. Option C only changes the required rate of return and keeps all other variables constant, which is not a comprehensive way to assess project sensitivity. Option D involves assigning extreme values to all variables, which is not specific to changes in a single variable. Option E compares actual and projected values, which is more of a variance analysis than a sensitivity analysis.

Sensitivity Analysis of a Project Is Conducted by