The Difference Between Scenario Analysis and Sensitivity Analysis Is That

question 58

Multiple Choice

The difference between scenario analysis and sensitivity analysis is that:

• A)scenario analysis is based upon the IRR and sensitivity analysis is based upon NPV.
• B)only sensitivity analysis allows us to change our estimated inputs of our NPV analysis.
• C)only scenario analysis considers the effect on NPV of changing multiple project parameters.
• D)only scenario analysis breaks the NPV calculation into its component assumptions.