Question: Different techniques for analyzing project risk require different input variables and assumptions Suppose you are using the scenario analysis technique to evaluate project risk. You
Different techniques for analyzing project risk require different input variables and assumptions Suppose you are using the scenario analysis technique to evaluate project risk. You would change _______ is the model to evaluate the effect of the input factors on the expected value. 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 induces 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 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. Assuming that probability distribution is normal, the value of z is _______ Thus the project has a _______ change to generate an NPV of less than $0
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