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 assess its impact on the overall results. This is a useful tool to understand how changes in assumptions or inputs can affect the NPV estimates. Forecasting simulation involves generating multiple scenarios to assess potential outcomes, and Monte Carlo simulation is a type of forecasting simulation that involves using random variables to generate potential outcomes. Scenario analysis involves creating specific scenarios to analyze the impact on NPV estimates. Therefore, option C is the most appropriate answer.

Which Answer Describes an Analysis of What Happens to NPV