2013: Journal no. 1

THE SENSITIVITY ANALYSIS AS A METHOD OF QUANTIFYING THE DEGREE OF UNCERTAINTY

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Authors:  
Tatiana MANOLE, PhD, professor, IEFS

In this article the author relates about the uncertainty of any proposed investment or government policies. Taking in account this situation, it is necessary to do an analysis of proposed projects for implementation and from multiple choices to choose the project that is most advantageous. This is a general principle. The financial science provides to the researchers a set of tools with what we can identify the best project. The author aims to examine three projects that have the same features, applying them to various methods of financial analysis, such as net present value (NPV), the discount rate (SAR), recovery time (TR), additional income (VS) and return on invested (RR). All these tools of financial analysis are in the cost-benefit analysis (CBA) and have the aim to streamline the public money that are invested to achieve successful performance.

Keywords:  
sensitivity, uncertainty, expected value, cost-benefit analysis, net present value, discount rate, recovery time, extra income, achieved profitability.