Sensitivity Analysis Is the Form of Risk Analysis

question 76

Multiple Choice

Sensitivity analysis is the form of risk analysis

• A) that examines the relationship between total firm cash flows and the NPV of a particular project.
• B) that examines the volatility of NPV.
• C) that examines the impact of key variables such as sales or costs in various combinations.
• D) that examines the impact of key variables such as sales or costs one at a time.

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Definitions:

Interests

The various pursuits or concerns that capture the attention, concern, or investment of an individual or group.

Values

Core beliefs or principles that guide and influence behavior and decision-making processes within individuals or organizations.

Synectics

A creative problem-solving method that seeks innovative solutions by stimulating thought through the use of metaphors and analogy.

Fantasy Analogy

Using imaginative scenarios or fictional stories to explain or understand real-life situations, often to simplify complex concepts.