The Difference Between Scenario Analysis and Sensitivity Analysis Is That

question 37

Multiple Choice

The difference between scenario analysis and sensitivity analysis is that

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

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Definitions:

Caffeine Intake

The consumption of caffeine, a stimulant, which is found in various foods and beverages, including coffee and tea.

Environmental Changes

Alterations or modifications to the natural environment, often resulting from human activities or climatic variations, that can have impact on living organisms.

Benzodiazepines

A class of drugs primarily used for treating anxiety, but also used in the treatment of seizures, insomnia, and alcohol withdrawal, known for their sedative effects.

Nonbenzodiazepines

A class of psychoactive drugs that act similarly to benzodiazepines on the central nervous system but tend to have fewer side effects, used primarily as sleep aids.