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Financial Appraisal of a Project
Md. Alamgir,
Associate Professor, BIBM
Former Central Banker
Cost of the Project
12
SENSITIVITY ANALYSIS OF A PROJECT
Sensitivity analysis shows how the value of the criterion (say,
NPV, IRR etc.) changes with the changes in the value of any
variable in the analysis. In other words, it is the investigation of
what happens to IRR or NPV when only one variable is
changed.
To illustrate how sensitivity analysis works,
the following project can be considered: