Differentiate between sensitivity analysis and scenario analysis.What advantage does scenario analysis have over sensitivityanalysis?

Q: What is sensitivity analysis? Explain.

A: Financial models refer to the summary or brief of a company's performance, on the basis of the…

Q: How to compare and contrast probable and estimable contingencies vs. remote contingencies.

A: Contingencies: Contingencies are the incidences   which may  or may not happen  and it depend  on…

Q: Which Variable Is most critical in Sensitivity Analysis?

A: Sensitivity analysis helps to analyze the project by considering different variables. It helps…

Q: Discuss the sensitivity of the model to changes in the value of the input variables

A: It is a technique that is used to get the estimates of independent variables by changing the…

Q: How does the decision-maker use the scenario analysis?

A: Scenario analysis helps investors and analysts in making better decisions.

Q: How do simulation analysis and scenario analysis differ in the way theytreat very bad and very good…

A: The process to evaluate different probable events and their outcomes that is end result of a project…

Q: Sensitivity Analysis Methods

A: Sensitivity analysis is an analysis method that is used to identify how many variations in the input…

Q: Describe the Sensitivity Analysis for Mutually Exclusive Alternatives?

A: Sensitivity analysis portrays how various values of an independent factor under a given arrangement…

Q: Describe the benefits of benchmarking.

A: Benchmarking is a way to measure something in corporate environment, it is also used to promote…

Q: Why do we need stress testing and scenario analysis?

A: A stress test or scenario analysis is used to determine and analysis the outcome of a financial…

Q: What is performance testing and what are its bottlenecks?

A: It examines financial records, individual transactions, and the processes involved in obtaining and…

Q: What techniques can be used to analyze real options?

A: A choice accessible to the organization's managers related to the investment opportunities is known…

Q: Describe the Sensitivity Analysis method performed for Mutually Exclusive Alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: What are the steps in computing the cost of a prediction error when using the EOQ decision model?

A: Economic Order Quantity (EOQ): Economic order quantity is the quantity of order that is purchased…

Q: What are the appealing qualities of Payback Screening?

A: The payback method is the simplest way of checking the viability of the project. The payback method…

Q: What are the ramifications of doing a CVP analysis

A: It   is about the ramifications of doing a CVP analysis:

Q: is profile measurement and analysis? What are the limitations of this approach?

A:

Q: The internal rate of return (IRR), despite its shortcomings, can be a useful analysis tool for…

A: IRR is the required rate of return for the project to have zero Net Present value.

Q: QUESTION 28 The kind of analysis that consists of rerunning the model to determine the effect on the…

A: There are various financial model used to analyze data.

Q: What are the two primary factors that are difficult to estimate in sensitivity analysis?

A: Answer: Sensitivity analysis is commonly used in determining the interactions in a system or even a…

Q: What role does MAD play in evaluating a forecasting model?

A: MAD refers to mean absolute deviation. It is also known as average absolute deviation which is the…

Q: What are the relative merits and disadvantages of a current system survey?

A: System Survey: System survey is defined as the process of determining the elements of information of…

Q: suitable behavioral model?

A: Behavioral Model: Behavioral Model from its name only suggests the study of behavior. The study of…

Q: What are the implications of CVP analysis?

A: The CVP analysis stands for cost volume profit analysis.

Q: How is the ERC (efficient response coefficient) determined and which role analyst forecasts play in…

A: The earnings response coefficient, or ERC, is a calculated ratio between stock returns and the…

Q: Compare judgmental, time series, and causal forecasting models.

A: Judgmental models are the subjective criteria in which gauges are based on master ideas. Individuals…

Q: Sensitivity analysis is the analysis of the effect of parameter changes on the optimal solution.…

A: Sensitivity analysis is done to understand changes in a target variable when changes are made in…

Q: Discuss the concept of sensitivity analysis

A: Financial analysis is the process of analyzing and estimating the financial data and information…

Q: When we perform sensitivity analysis for mutually exclusive alternatives, itmay be more effective to…

A: Net present worth is acknowledged as the current worth or value of a project which is adjusted as…

Q: Explain briefly how a sensitivity analysis is done and what the analysis is designedto show.

A: The question is based on the concept of a sensitivity analysis, which is a very common analysis used…

Q: Give an example of a Sensitivity Analysis performed for Mutually Exclusive Alternatives?

A: Mutually exclusive alternatives are those alternatives out of which only one can be selected at a…

Q: Explain Measures of Variance and Risk?

A: Variance tests normal or normal variability. Variability is volatility for investors, and volatility…

Q: What is the iceberg effect? How can CASE tools help to minimize this phenomenon?

A: The Iceberg Principle or Iceberg Theory is a hypothesis that proposes that we can't see or recognize…

Q: Discuss the use of sensitivity analysis as a way of evaluating project risk.

A: Sensitivity analysis Sensitivity analysis is said to be an evaluation tool that makes an assessment…

Q: When we work with the breakeven point, how important is it to understand what a decision variable…

A: The question is related to Marginal Costing. The break-even point is that level of sales at which…

Q: What differential analysis and why would we use it?

A: Decision making is the process of taking the decisions based on the costs and different kind of…

Q: What is the replacement analysis?

A: Replacement analysis is one of the keys examinations in capital budgeting.

Q: What are some pros and cons of computing an expected return using a user-specified model versus…

A: Expected Return: As opposed to observed returns that are measured at the end of a given period, the…

Q: Why is Scenario Analysis useful?

A: Scenario Analysis is a process where various (more than one) input changes are made at the same time…

Q: Explain the Relationship to the PW Analysis?

A: The question is based on the concept of present worth analysis of a project or cash flows.

Q: Brief illustrations and examples for sensitivity analysis

A: Sensitivity analysis is the analysis which considers the impact of change in one variable on the…

Q: Define the term Sensitivity Analysis?

A: Sensitivity analysis is a financial modelling tool which aims to analyze the change in output…