Sensitivity analysis is a technique that ________.

Question

Quizplus · Accepted Answer

Sensitivity analysis is a technique that helps to understand how changes in assumptions may affect the results of a decision or investment. It is a method to analyze the sensitivity of output or results to changes in key input variables, and it can help decision-makers to identify and manage risks associated with their decisions. For instance, sensitivity analysis can be used to determine the impact of changes in interest rates, inflation levels, or demand conditions on the profitability and viability of a project or investment. Therefore, the correct answer is D, which states that sensitivity analysis shows how results differ when underlying assumptions change.

Sensitivity Analysis Is a Technique That ________