Investment appraisal - Using sensitivity to assess risk
When thinking about risk and return and how the two interact with each other. NPV (net present value) by itself simply focuses on return and a lot of organisations make the mistake of simply using return as a basis on which to make their decisions. Now if you ask any investor how they make their decisions, they will tell you that risk is just as important to consider alongside return. And therefore we need to balance risk and return in making investment decisions and this is where sensitivity analysis assists with those decisions.
Please note before purchasing this module it is assumed that you understand how to perform NPV calculations. If you do not have this knowledge then we would highly recommend you view the module 'Investment Appraisal – Basics'
What you will learn
An awareness of why it is important to consider risk in the investment appraisal process
The module will also so show you show how we perform sensitivity analysis on net present value (NPV) calculations
Who should attend
Finance staff and business managers who wish to enhance their knowledge of investment appraisal as well as its application for business.
View full event details
- Risk vs return
- Accounting for risk
- Sensitivity analysis
- Sales price and sales volume
- Sales price sensitivity and sales volume sensitivity
- Present value of revenue
- Discount factor sensivity
- Project life sensitivity
- Evaluation of sensitivity
Tel: 0330 060 3303