Project Risk Evaluation Methods - Sensitivity Analysis
AbstractThe viability of investment projects is based on IRR and NPV criteria. In the economic analysis of the projects there are some aspects of project feasibility which may require sensitivity and risk analysis. Sensitivity analysis estimates the effect on achieving project objectives if certain assumptions materialize or not. This paper presents the purpose of sensitivity analysis and the steps that must be followed in order to perform a sensitivity analysis as well as a numeric example.
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Bibliographic InfoArticle provided by University of Petrosani, Romania in its journal Annals of the University of Petrosani - Economics.
Volume (Year): 9 (2009)
Issue (Month): 2 ()
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Web page: http://www.upet.ro/
investment project; NPV; IRR; sensitivity analysis; base-case; key variables; sensitivity indicator; switching value;
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