Sensitivity analysis can be used to identify variables most crucial to a c. project's success Sensitivity analysis is used to obtain expected, optimistic, and pessimistic values for project cash flows. Rather than basing one's estimate of NPV just on expected cash flows, it makes more to average the NPVs calculated from the pessimistic and optimistic estimates of cash flow. Risk is reduced when a high proportion of costs are fixed. The break-even level of sales for a project is higher when break-even is defined in terms of NPV rather than accounting income. Fixed and Variable Costs. In