Lecture 4 capital budgeting in more complicated scenarios英文.pdfVIP

Capital budgeting in more complicated scenarios Bo Sun 1 I. Sensitivity Analysis and What-if Questions… • The NPV and IRR for an investment will change as we change the values that we use for different variables. • One way of analyzing uncertainty is to check to see how sensitive the decision measure (NPV, IRR..) is to changes in key assumptions. While this has become easier and easier to do over time, there are caveats that we would offer. Cavea