Question

Sensitivity analysis measures: Group of answer choices Changes in the depreciation tax shield over the life of the project Changes in production levels with changes in revenues Changes in taxes payable with changes in a stock's current price changes in the retention rate with changes in net income Changes in fixed costs with changes in the operating cash flow None of the above

Answer 1

None of the above

Step-by-step explanation:

A sensitivity analysis measures how under a certain set of assumptions, different values of an independent variable influence the dependent variable. It is also known as what if analysis and it is based on various assumptions. Options given in the question like changes in depreciation tax shield over a project's life, changes in production levels with the changes in revenue etc. are absolutely certain to an extent, or in other words, bound to happen.