Question: Please answer all the questions even though I've enetered what I think is right. 3. sensitivity and scenario analysis Different techniques for analyzing project risk

 Please answer all the questions even though I've enetered what I

think is right. 3. sensitivity and scenario analysis Different techniques for analyzing

Please answer all the questions even though I've enetered what I think is right.

3. sensitivity and scenario analysis 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. one input variable at a time Martina 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. NPV (Millions of dollars) Base Case NPV I Base Case Cost of Capital 15 12 COST OF CAPITAL (Percent) This curve implies that the project is not very sensitive to changes in cost of capital. The project's NPV is likely to become negative if the cost of capital increases to 15%

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