Question: What are the two main drawbacks of sensitivity analysis? It does not consider interaction among variables. It considers the effects of interactions among variables. It

What are the two main drawbacks of sensitivity analysis?

It does not consider interaction among variables.

It considers the effects of interactions among variables.

It is easy to compute.

It may increase the false sense of security among managers if all pessimistic estimates of NPV are positive.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!