ConceptIntermediate
What are the three tools for analyzing the risk of project cash flows mentioned in the chapter?
The three tools for analyzing the risk of project cash flows are sensitivity analysis, scenario analysis, and simulation analysis.
Key points
- Sensitivity analysis identifies the most important factors affecting project success.
- Scenario analysis considers multiple value drivers under different scenarios.
- Simulation analysis examines a large number of possible outcomes using computer software.
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Financial Management: Principles and Applications
Sheridan Titman
Thirteenth Edition · Pearson