Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 21 - Capital Budgeting and Cost Analysis - Assignment Material - Questions - Page 830: 21-5

Answer

Sensitivity analysis can be incorporated into DCF (Discounted Cash Flow) analysis by assessing how variations in key input parameters impact the DCF of a project. This involves testing changes in factors like revenue assumptions, cost assumptions, tax rates, and discount rates to understand how sensitive the project's value is to these variables.

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