Sensitivity analysis determines the: Multiple Choice net present value range that can be realized from a proposed project. degree to which a project relies on its initial costs. ideal ratio of variable costs to fixed costs for profit maximization. range of possible outcomes given that most variables are reliable only within a stated range. degree to which the net present value reacts to changes in a single variable.

Question

Business

Andrea Kidd

1 July, 05:20

Sensitivity analysis determines the: Multiple Choice net present value range that can be realized from a proposed project. degree to which a project relies on its initial costs. ideal ratio of variable costs to fixed costs for profit maximization. range of possible outcomes given that most variables are reliable only within a stated range. degree to which the net present value reacts to changes in a single variable.

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Emilee Lynn · Answer 1

It determines the degree to which the net present value reacts to changes in a single variable

Explanation:

Sensitivity Analysis is a tool which is used in financial modeling to analyze how the net values of a set of independent variables affect a single dependent variable under certain specific conditions.

It shows how different values of the independent variable causes changes in the single dependent variable. It predicts the result of a decision given a certain range of variables.