Which answer describes an analysis of what happens to NPV estimates when we change the values of one variable at a time?

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Quizplus · Accepted Answer

Sensitivity analysis is the process of changing one variable at a time to see the impact it has on the net present value (NPV) estimates. It helps identify the variables that have the greatest impact on the estimated NPV and can be used to make more informed decisions. Forecasting simulation, Monte Carlo simulation, and scenario analysis are all different techniques for analyzing financial information but do not specifically relate to the impact of changing one variable at a time on NPV estimates.

Which Answer Describes an Analysis of What Happens to NPV