Sensitivity Analysis Is Based On

Multiple Choice

Sensitivity analysis is based on:

A) varying a single variable and measuring the resulting change in the NPV of a project.
B) applying differing discount rates to a project's cash flows and measuring the effect on the NPV.
C) expanding and contracting the number of years for a project to determine the optimal project length.
D) the best, worst, and most expected situations.
E) various states of the economy and the probability of each state occurring.