16642 Lecture Notes - Lecture 8: Scenario Analysis, Scenario Testing, Net Present Value
Document Summary
Lecture #08: making investment decisions: sensitivity & scenario analysis. Contents: steps of creating sensitivity analysis, steps of creating scenario analysis, sensitivity and scenario analysis. Sensitivity analysis: measures the impact on npv by changing only one variable or two variables of the project while holding all other variables constant. If you want to test two changing variables at the same time, only one result, i. e. , npv or. The npv results appeals after click ok" from the data table". You can then create charts and analyse the results from the table. Scenario analysis: measures impact on npv by changing several variables of the project at the same time. A base case scenario (most likely scenario) Ok": typing in the estimated optimistic values into the scenario values", then click ok". You can create as many scenarios as you wanted: click summary". Please do not click merge" or show" which will change the data of your original model: a window scenario summary" appeals.
