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.

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