Sensitivity Analysis

II. Sensitivity Analysis Sensitivity analysis measures the effect of changes in a particular variable, say revenues, on a project's NPV. To perform a sensitivity analysis, all variables are fixed at their expected values except one. This one variable is then changed, often by specified percentages, and the resulting effect on NPV is noted. An Excel "Data Table" is used below to find NPV for unit sales, salvage value, and cost of capital for the project, with the deviations from base case. This produces the sensitivity analysis for WACC as shown below. You MAY have to press your F9 key on your keyboard to update the values