Which One of These Is a Disadvantage of Sensitivity Analysis

question 23

Multiple Choice

Which one of these is a disadvantage of sensitivity analysis?

• A)Sensitivity analysis may decrease the false sense of security among managers.
• B)Sensitivity analysis fails to identify the key variable that affects a project's net present value.
• C)Each variable in sensitivity analysis is treated in isolation.
• D)A sophisticated computer program is required to conduct sensitivity analysis.
• E)Sensitivity analysis assumes most variables will achieve their most optimistic value.

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Definitions:

Genetics

The study of heredity and the variation of inherited characteristics, involving genes and DNA and how these are passed down from parents to offspring.

Desire

A strong feeling of wanting to have something or wishing for something to happen.

Intelligence

An individual’s ability to adapt to the environment.

Telomeres

The protective caps at the end of chromosomes that shorten with each cell division, associated with aging and cell lifespan.