Asked by Sareeka Ramlal on Jul 16, 2024
Verified
A combination of scenario and sensitivity analysis is called:
A) The upper and lower bound method.
B) The accounting breakeven method.
C) Financial breakeven analysis.
D) Simulation analysis.
E) Incremental revenue analysis.
Scenario Analysis
A process of analyzing possible future events by considering alternative possible outcomes (scenarios), often for the purpose of planning through uncertainty.
Sensitivity Analysis
Analyzes how different values of an independent variable affect a particular dependent variable under a given set of assumptions.
Simulation Analysis
Involves the use of mathematical models to predict the outcome of various financial strategies under different conditions.
- Understand the principles behind sensitivity and simulation analysis for project evaluation.
Verified Answer
Learning Objectives
- Understand the principles behind sensitivity and simulation analysis for project evaluation.
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