The Difference Between Scenario Analysis and Sensitivity Analysis Is That

question 62

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) scenario analysis considers the effect on NPV of changing multiple project parameters.
• D) only scenario analysis breaks the NPV calculation into its component assumptions.

---

Definitions:

Positive Reinforcers

Stimuli that, when presented after a behavior, increase the likelihood of that behavior being repeated.

Negative Reinforcers

Stimuli that when removed after a response, increase the likelihood of that response being repeated in the future.

Rewards

In psychology, positive reinforcements or incentives given to encourage desired behaviors.

Tokens

In behavior therapy, tangible items given as rewards for performing certain behaviors or achieving specific objectives, part of a token economy system to reinforce desired behavior.