6 Sensitivity and EVs Sensitivity analysis is a technique which is similar to the ‘What if?’ facility provided by a computer spreadsheet.
By using this technique it is possible to establish which estimates (variables) are more critical than others in affecting a decision.
The process is as follows:
§ Best estimates for variables are made and a decision arrived at. For example, a NPV calculation may indicate accepting a project.
§ Each of the variables is analysed in turn to see how much the original estimate can change before the original decision is reversed. For example, it may be that the estimated selling price can fall by 5% before the NPV becomes negative and the project would be rejected.
§ Estimates for each variable can then be reconsidered to assess the likelihood of the decision being wrong. For example, what is the chance of the selling price falling by more than 5%?
6.1 Strengths of sensitivity analysis
§ There is no complicated theory to understand.中 华 考 试 网
§ Information will be presented to management in a form which facilitates subjective judgment to decide the likelihood of the various possible outcomes considered.
§ It identifies areas which are crucial to the success of the project. If the project is chosen, those areas can be carefully monitored.
§ It indicates just how critical are some of the forecasts which are considered to be uncertain. |
发表于 2012-2-23 17:09:42
