1. Sensitivity analysis examines the impact of _______ on a decision criterion, such as NPV.

changing several variables

holding all variables constant

NPV sensitivity

changing one variable

2.

Scenario analysis examines the impact of _______ on a decision criterion, such as NPV.

analytical scenarios

changing several variables

holding all variables constant

changing one variable

3.

What is the main benefit of doing a sensitivity analysis?

It helps determine the appropriate discount rate.

It prevents incorrect project decisions.

It identifies the variables that have the strongest effect on cash flows.

It shows the outcome when a set of variables changes.