The Difference Between Scenario Analysis and Sensitivity Analysis Is

question 80

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.
• E)Sensitivity analysis allows for variations in many of the underlying assumptions simultaneously.

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Definitions:

Traditional Categories

Established, conventional classifications or groups, often used to sort and organize subjects or concepts according to common traits.

Fiscal Crime

Illegal activities that harm the financial health of an organization, such as fraud, embezzlement, or money laundering.

White-Collar Crime

A crime that typically occurs in a business context. Popularly used to refer to an illegal act or series of acts committed by a person or business entity using nonviolent means.

Property Crime

Offenses that involve the unauthorized taking of or damage to another's property.