If a Company Were Interested in Knowing the Effect of a Single

question 35

Multiple Choice

If a company were interested in knowing the effect of a single input change on the net present value of a project, then the company would most likely want to perform

• A) a Monte Carlo simulation.
• B) scenario analysis.
• C) sensitivity analysis.
• D) none of the above.

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Definitions:

Predictability

The extent to which future events or behaviors can be forecasted based on current or past information.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Mental Processes

Internal, covert activities of the mind, such as thinking, feeling, and remembering.

External Environment

All outside factors and influences that impact the operation and success of an entity, including economic, social, political, and technological factors.