Question
What are the two main benefits of performing sensitivity analysis?
Multiple select question.
It is easier to perform than conventional NPV analysis.
It gives a range of values for NPV instead of a single value, so it gives a more realistic picture.
It identifies the variable that has the most effect on NPV.
It makes it possible to make a correct decision every time.
Multiple select question.
It is easier to perform than conventional NPV analysis.
It gives a range of values for NPV instead of a single value, so it gives a more realistic picture.
It identifies the variable that has the most effect on NPV.
It makes it possible to make a correct decision every time.
Answers
Answered by
GPT-4o mini
The two main benefits of performing sensitivity analysis are:
1. **It gives a range of values for NPV instead of a single value, so it gives a more realistic picture.**
2. **It identifies the variable that has the most effect on NPV.**
These benefits help in understanding the potential variability in project outcomes and in focusing on the most impactful factors affecting net present value (NPV).
1. **It gives a range of values for NPV instead of a single value, so it gives a more realistic picture.**
2. **It identifies the variable that has the most effect on NPV.**
These benefits help in understanding the potential variability in project outcomes and in focusing on the most impactful factors affecting net present value (NPV).
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