As the degree of sensitivity of a project to a single variable rises,the:
A)less important the variable to the final outcome of the project.
B)less volatile the project's net present value to that variable.
C)greater the importance of accurately predicting the value of that variable.
D)greater the sensitivity of the project to the other variable inputs.
E)less volatile the project's outcome.

Question

Quizplus · Accepted Answer

As the degree of sensitivity of a project to a single variable rises, it becomes more important to accurately predict the value of that variable since it can significantly impact the final outcome of the project. Therefore, choice C is the correct answer. Choices A and E are opposite statements and choices B and D are not necessarily true.

As the Degree of Sensitivity of a Project to a Single