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The Difference Between Scenario Analysis and Sensitivity Analysis Is That

Question 58

Multiple Choice

The difference between scenario analysis and sensitivity analysis is that:


A) scenario analysis is based upon the IRR and sensitivity analysis is based upon NPV.
B) only sensitivity analysis allows us to change our estimated inputs of our NPV analysis.
C) only scenario analysis considers the effect on NPV of changing multiple project parameters.
D) only scenario analysis breaks the NPV calculation into its component assumptions.

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