The Difference Between Scenario Analysis and Sensitivity Analysis Is

question 10

Multiple Choice

The difference between scenario analysis and sensitivity analysis is:

• A)Scenario analysis is based upon the internal rate of return (IRR)and sensitivity analysis is based upon net present value (NPV).
• B)Only sensitivity analysis allows us to change our estimated inputs of our net present value (NPV)analysis.
• C)Scenario analysis considers the effect on net present value (NPV)of changing multiple project parameters.
• D)Only scenario analysis breaks the net present value (NPV)calculation into its component assumptions.

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Definitions:

Partnership

A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Individual

Pertaining to or characteristic of a single, particular person or thing as opposed to a group.

Mining Partner

A member of a partnership formed for the purpose of mining activities, sharing in the profits and liabilities of the venture.

Transferable

Capable of being passed on or conveyed from one person or entity to another.