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:

Competitive Intelligence

The process of gathering, analyzing, and using information, legally and ethically, from the business environment including competitors for strategic decision making.

Data Mining

A process that involves the computerized search for meaningful trends in a large amount of data.

Marketplace

A platform, either physical or digital, where goods and services are exchanged between buyers and sellers.

Decision Support System

A computer-based system that helps in making informed decisions by analyzing large volumes of data and presenting it in an actionable format.