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Sensitivity and scenario analysis Different techniques of project risk analysis involve different input variables and assumptions. The procedure in which a set of key elements
Sensitivity and scenario analysis Different techniques of project risk analysis involve different input variables and assumptions. The procedure in which a set of key elements affecting the expected value are changed to study the effect on the expected value is called ____ analysis. Zhi 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. 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, Zhi 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: Complete the missing information in Zhi's report: The expected net present value of the project is ____. Standard deviation of the net present value (the NPV of the project is likely to vary by) ____ million
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