10.2 Both calculate how NPV depends on input assumptions. Sensitivity analysis changes inputs one at a time,...

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10.2 Both calculate how NPV depends on input assumptions. Sensitivity analysis changes inputs one at a time, whereas scenario analysis changes several variables at once. The changes should add up to a consistent scenario for the project as a whole.

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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Question Posted: Jul 31, 2024 11:00 AM

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10.2 Both calculate how NPV depends on input assumptions. Sensitivity analysis changes inputs one at a time,...

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Invest in technology A Invest in technology B Demand high Continue NPV = $20 million Demand low Demand high Stop project and sell equipment Salvage value $1 million Continue NPV = $18 million Demand low Stop project and sell equipment Salvage value $5 million

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Fundamentals Of Corporate Finance

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