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Sensitivity Analysis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Sensitivity Analysis

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • September 7, 2016 at 12:17 pm #338573
    abhishekopen
    Member
    • Topics: 9
    • Replies: 8
    • ☆

    How to calculate sensitivity analysis if the question says that initial investment is increased or decreased by an amount say 2 million ?

    September 7, 2016 at 5:18 pm #338656
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    You would calculate the change in the NPV that would result from the increase of decrease in the initial investment.

    September 7, 2016 at 6:50 pm #338753
    abhishekopen
    Member
    • Topics: 9
    • Replies: 8
    • ☆

    that means adding the increased amount in the initial investment and re calculating the new NPV ? Also there would be increase in the capital allowance i guess ?

    September 7, 2016 at 8:24 pm #338797
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Very true 🙂

    So there is quite a lot of workings necessary!

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