SENSITIVITY ANALYSIS

The Sensitivity Analysis

The Sensitivity Analysis

Introduction

Sensitivity analysis is a financial term, used widely in the business world when making investment decisions, which calculates the new cash flows and the NPV. Thus, having the new cash flows and the new van we can calculate or improve our estimates of the project we started in the case that these variables change or initial errors of appreciation on our part on the data initially. Sensitivity analysis is an account for and prediction of the effect of changes of input parameters (investment costs, cash flows, hurdle rate, the level of reinvestment) of the ...