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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Definitions:

Operant Conditioning

The method of transforming behavior intensity by administering either reinforcements or punishments.

Shaping

A method of training by which successive approximations toward a desired behavior are reinforced.

Withholding Reinforcement

is a behavioral strategy where a positive outcome or reward is not given, aiming to decrease or eliminate a certain behavior.

Extinction

In behavior psychology, the gradual disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.