Asked by Sareeka Ramlal on Jul 16, 2024

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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.
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Stevie HollandJul 21, 2024
Final Answer :
D
Explanation :
Simulation analysis combines scenario and sensitivity analyses by examining the effects of changing different variables simultaneously to see how changes in those variables affect outcomes.