Explain Sensitivity Analysis and Scenario Analysis.
The Sensitivity analysis determines the single variable over the variables in broad range and values while in the scenario analysis the limited range of the variable value are determined and assessed. The analysis is an important part of the decision making and regarding these two analyses they provide information regarding the failure or success of the investments. These analyses are used by business,. Firms and individuals to determine whether their future profits will satisfy their current investment plans and decisions. The findings help them invest in the right funds and securities as well as projects. The analysis also helps in the process of stock investments, Company sale and acquisition bas well as personal investment. The sensitivity analysis addresses the single variable that impacts the investment decision. It is analyzed by changing its value while in the case of scenario analysis all possible range of variables that impact the investment decision are assessed and analyzed.