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4. Sensitivity analysis A. looks at the most reasonably optimistic and pessimistic results for a project B. helps identify the variable within a project that
4. | Sensitivity analysis | |||||
A. | looks at the most reasonably optimistic and pessimistic results for a project | |||||
B. | helps identify the variable within a project that presents the greatest forecasting risk | |||||
C. | is used for projects that cannot be analyzed by scenario analysis because the cash flows are unconventional | |||||
D. | is generally conducted prior to scenario analysis just to determine if the range of potential outcomes is acceptable | |||||
E. | illustrates how an increase in operating cash flow caused by changing both the revenue and the costs simultaneously will change the net present value for a project | |||||
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