One of the problems inherent in sensitivity analysis is that:
A) it suggests when it may be useful to spend money to get a better estimate of sales or costs.
B) most projects are equally sensitive to all variables.
C) it ignores any interrelationships between variables.
D) the cost of conducting the analysis is excessive.

Question

Quizplus · Accepted Answer

Sensitivity analysis assumes that variables are independent of each other, and that any changes in one variable will not affect others. This may not be true, especially in complex projects. Therefore, sensitivity analysis may overlook the interrelationships between variables, which could lead to incorrect conclusions.

One of the Problems Inherent in Sensitivity Analysis Is That