Sensitivity Analysis Is

question 99

Multiple Choice

Sensitivity analysis is

• A)an appropriate response to uncertainty in cash flow projections.
• B)useful in measuring the variance of the Fisher rate.
• C)typically conducted in the post investment audit.
• D)useful to compare projects requiring vastly different levels of initial investment.

---

Definitions:

Disposable Income

Financial endowment to households for the purpose of spending and saving after mandatory tax deductions.

Consumption

The use of goods and services by households. It represents the end-use of products and is a primary component of aggregate demand in an economy.

Disposable Income

The allocation of funds households have to spend and save, after income tax adjustments.

Wage Earning

The act of receiving regular compensation for labor or services, typically on an hourly, daily, or piecework basis.