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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Sensitivity Analysis
How to calculate sensitivity analysis if the question says that initial investment is increased or decreased by an amount say 2 million ?
You would calculate the change in the NPV that would result from the increase of decrease in the initial investment.
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 ?
Very true 🙂
So there is quite a lot of workings necessary!