Definition Of

Sensitivity analysis

Change of sensitive subjects related with a firm's investment (cash flow, sell-value,sell-advice,demand of products,change of expenditure, etc.) will change  Net Present Value(NPV),the technique to analysis that how much the NPV will change, is Sensitivity Analysis.

According to Besely and Brigham,” Sensitivity analysis is a technique that shows exactly how much the NPV will change in response to a given change in a input variable, other things held constant.”

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