SENSITIVITY ANALYSIS Sensitivity analysis is the process of varying the assumptions underlying a decision to determine the decision's sensitivity to those assumptions. It enables managers to assess how responsive NPV is to changes in key variables that are used to calculate it (Drury 1996). Some of the factors that influence the NPV of multinationals are taxes, exchange rates, estimating the terminal value of a project using different methodologies, political risk and the real operating options (Buckley 2000). …showed first 75 words of 2300 total…

…showed last 75 words of 2300 total…MADURA, J. (2003) International financial management, 7th ed., Ohio: Thomson 9.ROSS, S.A., WESTERFIELD, R., JAFFE, J. (1999) corporate finance, 5th ed., London: McGraw Hill. 10.RODRIGUEZ, R. and CARTER, E. (1984) international financial management, 3rd ed., Englewood Cliff, New Jersey: Prentice Hall. 11.SHAPIRO, A. C. (1999) Multinational financial management, 6th ed., New York : Wiley, 12.THE HINDU BUSINESS LINE, multinational capital budgeting (2002) <http://www.blonnet.com/mentor/2002/03/04/stories/2002030400701300.htm> (updated on 4th March 2002 and accessed on 2nd January 2003)