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Part $1$

How can sensitivity analysis be incorporated in discounted cash flow$($DCF$)$ analysis?

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Part $1$

A$.$

Sensitivity analysis can be incorporated into DCF analysis by helping managers to focus on decisions that are most sensitive to different assumptions and to worry less about decisions that are not so sensitive$.$

B$.$

Sensitivity analysis can be incorporated into DCF analysis by applying sensitivity analysis in capital budgeting decisions. This could be done by varying each of the inputs to the NPV calculation by a certain percentage and assessing the effect of the change on the$$ project's NPV$.$

C$.$

Sensitivity analysis can be incorporated into DCF analysis by examining how the DCF of each project changes with changes in the inputs used. These could include changes in revenue$$ assumptions, cost$$ assumptions, tax rate$$ assumptions, and discount rates.

D$.$

All of the above are correct.