Question: The difference between Scenario Analysis and Sensitivity Analysis, with respect to the NPV of a Capital Budgeting Project is: a. Both Analyses calculate the Value
The difference between Scenario Analysis and Sensitivity Analysis, with respect to the NPV of a Capital Budgeting Project is:
| a. | Both Analyses calculate the Value of NPV by changing all of the Input Variables. | |
| b. | For all practical purposes, there is little or no difference between Scenario and Sensitivity Analyses, because both are known as What-If-Analyses. | |
| c. | Scenario Analysis forecasts the Calculated Value NPV, when the values of more than one input variables are changed. On the other hand, Sensitivity Analysis forecasts the Calculated Value of NPV when, the value of only one input Variable is changed. | |
| d. | Both Analyses are used to detect the right values of input variables that would maximize the calculated Value of NPV. | |
| e. | Sensitive Analysis forecasts the Calculated Value NPV, when the values of more than one input variables are changed. On the other hand, Scenario Analysis forecasts the Calculated Value of NPV when, the value of only one input Variable is changed. |
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