Different techniques for analyzing project risk require different input variables and assumptions.

Suppose you are using the sensitivity analysis technique to evaluate project risk. You would change

in the

model to evaluate the effect of the input factors on the expected value.

Diana 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, Diana 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:

Standard deviation of the net present value $($the NPV of the project is fikely to vary by$)$

million.