Sensitivity Analysis Is Conducted By

question 39

Multiple Choice

Sensitivity analysis is conducted by:

• A)holding all variables at their base level and changing the required rate of return.
• B)changing the value of two variables to determine their interdependency.
• C)changing the value of a single variable and computing the resulting change in the project's NPV.
• D)assigning either the best or the worst possible value to every variable and comparing the results to the base case.
• E)reviewing a project after implementation to determine how the actual results are comparing to the predicted results.

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Definitions:

Covert Collusion

Covert Collusion occurs when businesses secretly cooperate to fix prices, limit supply or engage in other anticompetitive practices without public or regulatory knowledge.

Price Leadership

A market situation where one leading company sets the price for goods or services, which other competitors in the market then follow.

Colluding Oligopolist

Firms within an oligopoly that agree to work together instead of competing, in order to control prices and dominate the market.

Perfect Competitor

A theoretical market structure in which many firms sell identical products, and there are no barriers to entry or exit, leading to optimal price and output levels.