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.

---

Definitions:

Ossified

Becoming rigid or inflexible, often used metaphorically to describe ideas or structures that are no longer open to change.

Sleeper Effects

The detrimental effects of early-life adversity that occur only later in development.

Early-Life Adversity

Profound and pervasive deprivation experienced during infancy, often resulting in severe developmental delays.

Brain Stem

The base of the brain, which controls such elementary reactions as blinking and sucking, as well as such vital functions as breathing and sleeping.