Sensitivity Analysis Measures a Project's Stand-Alone Risk by Showing How

question 37

True/False

Sensitivity analysis measures a project's stand-alone risk by showing how much the project's NPV (or IRR) is affected by a small change in one of the input variables, say sales.Other things held constant, with the size of the independent variable graphed on the horizontal axis and the NPV on the vertical axis, the steeper the graph of the relationship line, the more risky the project, other things held constant.

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Definitions:

Shaking

Involuntary, rhythmic muscle movements involving to and fro movements of one or more parts of the body, often resulting from neurological conditions, stress, or cold.

Norepinephrine

A neurotransmitter and hormone involved in the body's response to stress, increasing heart rate and blood flow to muscles.

Heart Rate

The number of times a person's heart beats per minute, indicating cardiovascular health and activity levels.

Synaptic Vesicle

Membranous compartment that encloses a fixed number (called a quantum) of neurotransmitter molecules.