Sensitivity Analysis and Scenario Analysis Evaluation
If you were the CFO of a company that had to decide on hundreds of potential projects every year, would you want to use sensitivity analysis and scenario analysis as described in the chapter, or would the amount of arithmetic required take too much time and thus not be cost effective? What involvement would nonfinancial people such as those in marketing, accounting, and production have in the analysis?
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Usually a company with hundreds of potential projects every year has a capital budgeting system in place. Hence, using sensitivity analysis and scenario ...
Solution Summary
The solution examines sensitivity analysis and scenario analysis evaluations. What involvement would non financial people in marketing, accounting and production have in the analysis is determined.