ABSTRACT
This chapter explains how the sensitivity of the present value and internal rate of return with respect to various factors is determined. Also explained are the relations between sensitivity analysis and the economic concepts of derivative or slope and elasticity. Sensitivity analysis is related to the concepts of slope or derivative, and elasticity. The implementation of sensitivity analysis requires a fair amount of effort in changing the data concerned by percentages and then copying the resulting values. The Data, Table command automates this kind of work. The Data, Table command is very powerful, and can be used in many applications. Data Tables with a row input are similar to those with a column input, except that role of arguments and cells evaluated is interchanged. The Data, Table command can be used for sensitivity analysis of factors simultaneously. For example, the sensitivity of the internal rate of return with respect to variations of initial costs and net revenue may be determined.
