Scenario Analysis

question 86

Multiple Choice

Scenario analysis:

• A)determines the impact a $1 change in sales has on the internal rate of return.
• B)determines which variable has the greatest impact on a project's net present value.
• C)helps determine the reasonable range of expectations for a project's anticipated outcome.
• D)evaluates a project's net present value while sensitivity analysis evaluates a project's internal rate of return.
• E)determines the absolute worst and absolute best outcome that could ever occur.

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Definitions:

Power

The probability that a statistical test will correctly reject a false null hypothesis, or the test's sensitivity to detecting an effect.

Statistical Test

A procedure used to determine whether the observed data significantly deviates from a hypothesis.

Inferential Statistics

A branch of statistics that infers properties about a population based on a sample of data drawn from that population.

Descriptive Statistics

Values that organize and describe the characteristics of a collection of data, sometimes called a data set.