A Sensitivity Graph Shows % Deviation of the Variable from Expectation

question 42

Multiple Choice

A sensitivity graph shows % deviation of the variable from expectation on the x- axis and NPV on the y- axis. Variables may be represented by straight lines on the graph. Which variable will have the largest negative effect on NPV?

• A) Large upward gradient
• B) Small downward gradient
• C) Large downward gradient
• D) Small upward gradient

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