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Strengths of scenario analysis as compared to sensitivity analysis include which of the following?
a) Scenario analysis allows for the calculation of a project’s coefficient of variation so that the riskiness of projects can be compared to the firm’s average project.
b) Scenario analysis considers the sensitivity of net present value to changes in key variables, the likely range of variable values, and the interactions among variables.
c) Scenario analysis provides all necessary information about both a project’s risk and its profitability in a single step.
d) Answers (a) and (b) are correct.
e) Answers (a), (b), and (c) are correct.
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