Question: 6. Sensitivity and scenario analysis Different techniques for analyzing project risk tequire different input varables and asstmptions. The procedure in which one of the elements





6. Sensitivity and scenario analysis Different techniques for analyzing project risk tequire different input varables and asstmptions. The procedure in which one of the elements (or variables) affecting a project's expected value is changed to study its affect on the expected value is called analysis Daniclle is a risk analyst. She is conducting a sensutivity analysis to evaluate the riskoness of a new project that her compary is considering investing in. Her risk analysis report indudes the sensitivity curve shown on the graph. This curve implies that the project is very sensitive to changes in units sold, The project's Npy is likely to becoene negative if the number of units sold decreases by Along with the sensitivity analysis, Danielle is including a scenano analysis for the project in her report, giving the probability of the project generating an negative NPV. Her report includes the following information about the scenario analysis: Complete the missing informataon in Darielle's report: The expected net present volue of the project is Standard deviation of the riet present value (the NPV of the project is likely to vary by) mithon This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to decreases by Along with th vity analysis, Danielle is including a scenario analysis for the project in her report, 9 a negative NI eport includes the following information about the scenario analysis: This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to decreases by Along with the sensitivity analysis, Danielle is including a scenario analysis for the project in her report, giv a negative NPV. Her report includes the following information about the scenario analysis: Complete the missing information in Danielle's re \begin{tabular}{l|l} $2.25 million \\ $0.04 million \end{tabular} 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) milion. This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become n decreases by Along with the sensitivity analysis, Danielle is including a scenario analysis for the project in her report, giving the a negative NPV. Her report includes the following information about the scenario analysis: Complete the missing information in Danielle's report: The expected net present value of the project is
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