Explain the difference between sensitivity analysis and scenario analysis. Offer an argument for the proposition that scenario analysis offers a more realistic picture of a project's risk than does sensitivity analysis.© BrainMass Inc. brainmass.com October 10, 2019, 5:07 am ad1c9bdddf
Sensitivity Analysis and Scenario Analysis
Sensitivity and scenario analysis both are utilized for evaluating the best possible investment portfolio for the project. The sensitivity analysis provides results for uncertainty involved in the investment, while scenario analysis provides results for uncertainty involved in different situations in a business. In sensitivity analysis, the investment decision is taken according to the reliability of the outcome for a particular variable. But in scenario analysis, the decision of investment is taken by looking at the most reliable outcome by ...
Sensitivity analysis versus scenario analysis is examined. An offer an arguments for the proposition that scenario analysis offers a more realistic picture of a project's risk than does sensitivity analysis is determined.