The sensitivity of net present value (NPV) to the change in the price of new club. Introduction: Sensitivity analysis analyzes the impact of changing one variable on the net present value. It helps to identify the areas in which the forecasting errors would be severe. The basic concept of sensitivity analysis is to freeze the entire variables excluding one.

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Chapter 11, Problem 22QP

Summary Introduction

To determine: The sensitivity of net present value (NPV) to the change in the price of new club.

Introduction:

Sensitivity analysis analyzes the impact of changing one variable on the net present value. It helps to identify the areas in which the forecasting errors would be severe. The basic concept of sensitivity analysis is to freeze the entire variables excluding one.

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