Sensitivity analysis:. a. is used for projects that cannot be analyzed by scenario analysis because the cash flows are unconventional.
b. helps identify the variable within a project that presents the greatest forecasting risk.
c. illustrates how an increase in operating cash flow caused by changing both the revenue and the costs simultaneously will change the net present value for a project.
d. looks at the most reasonably optimistic and pessimistic results for a project.
e. is generally conducted prior to scenario analysis just to determine if the range of potential outcomes is acceptable.

Suppose life expectancy in years (l) is a function of two inputs, health expenditures (h) and nutrition expenditures (n) in hundreds of dollars per year. the production function is upper l equals ch superscript 0.40 baseline upper n superscript 0.60l=ch0.40n0.60. beginning with c = 1, a health input of $400400 per year (hequals=44) and a nutrition input of $400400 per year (nequals=44), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. the marginal product of health expenditures when h goes from 44 to 55 is nothing, and the marginal product of health when h goes from 66 to 77 is nothing. (round your answers to three decimal places.)