Sensitivity Analysis Is Used in Capital Budgeting to

Multiple Choice

Sensitivity analysis is used in capital budgeting to

A) Estimate a project's internal rate of return (IRR) .
B) Determine the optimal contribution margin given a set of resource constraints.
C) Determine the amount that a variable in a decision model (e.g., annual after-tax cash inflows) can change without changing the indicated decision (e.g., acceptance of a project) .
D) Simulate probabilistic customer reactions to a new product.
E) Capture income tax consequences.