Which of the following project risk analyses is best able to analyse the effect of a single input, uncorrelated with other inputs, on the NPV of a project?
A) sensitivity analysis.
B) scenario analysis.
C) simulation analysis.
D) none of the above.

Question

Quizplus · Accepted Answer

Sensitivity analysis is the best choice for analysing the effect of a single input, uncorrelated with other inputs, on the net present value (NPV) of a project. It helps in identifying the most critical factors that affect the project's outcome by varying one input at a time and observing how it affects the NPV. Scenario analysis and simulation analysis are suitable for analysing the impact of several inputs and their interdependencies.

Which of the Following Project Risk Analyses Is Best Able