Sensitivity Analysis Is a Risk Analysis Technique in Which Key

question 60

True/False

Sensitivity analysis is a risk analysis technique in which key variables are changed and the resulting changes in the
NPV and IRR are observed.

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Definitions:

Current Ratio

A liquidity ratio measuring a company’s ability to pay short-term obligations with its short-term assets.

Cash Dividends

Payments made by a corporation to its shareholders from its profits.

Short-term Investments

Financial assets expected to be converted into cash typically within a year, such as stocks or government bonds.

Inventory Turnover

A financial ratio that measures how many times a company's inventory is sold and replaced over a period.