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sensitivity and scenario analysis - help please - cash flow estimation and risk analysis 6. Sensitivity and scenario analysis Different techniques for analyzing project risk
sensitivity and scenario analysis - help please - cash flow estimation and risk analysis
6. Sensitivity and scenario analysis Different techniques for analyzing project risk require different input variables and assumptions: The procedure in which one of the elements (or variables) affecting a project's expected value is changed to study its effect on the expected value is called analysis. Martina is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new prolect 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 the price of the product. The project's NPV is likely to become negative if the price for which the product can be sold decreases by Along with the sensitivity analysis, Martina is induding 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 Martina's report: The expected net pristent value of the project is Standard deviation of the net present value (the NPN of the project is likety to vary by Step by Step Solution
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