The [term1] analysis is the widely used approach that manage…

The [term1] analysis is the widely used approach that managers use to recognize uncertainty about results of any models and to obtain an immediate financial estimate of the financial consequences of possible prediction errors due to the variance in the model factors/inputs. In the context of capital budgeting this means evaluating how sensitive are the capital budgeting decisions to various inputs such as tax rate, discount rate or timing of the cashflows (2 words, 1 point for each word, up to 2 points). (Hint: use the broadest term from the textbook that unites all potential techniques under this umbrella).

What is the name of the function that is included in “What-i…

What is the name of the function that is included in “What-if” sensitivity analysis in Excel that allows calculating the targeted value (e.g., Net Present Value in our case) when two of the inputs into the model change simultaneously (e.g., tax rate and discount rate in the example from lectures)?