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Answers for the first blank, You would change... (one input variable at a time / several input variables together) Answers for the second blank, units

image text in transcribedAnswers for the first blank, "You would change..." (one input variable at a time / several input variables together)

Answers for the second blank, "units sold decreases by..." (10% / 5%)

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4. Sensitivity and scenario analysis Different techniques for analyzing project risk require different input variables and assumptions. Suppose you are using the scenario analysis technique to evaluate project risk. You would change in the model to evaluate the effect of the input factors on the expected value. Mina is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new project that her company is considering investing in. Her risk analysis report includes the sensitivity curve shown on the graph. NPV (Millions of dollars ---_---Base Case NPV Base Case Units Sold 20-15 -10-5 0 5 10 15 20 CHANGE IN UNITS SOLD !Percent This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become negative if the number of units sold decreases by Along with the sensitivity analysis, Mina is including a scenario analysis for the project in her report, giving the probability of the project generating a negative NPV. Her report includes the following information about the scenario analysis

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