SENSITIVITY ANALYSIS AND SCENARIO METHOD FOR EVALUATION OF EFFICIENCY OF INVESTMENT PROJECTS IN RISK CONDITIONS

Abstract

The aim of the research is that on the project we analyze the sensitivity and scenario method as one of the very important methods that allow us to assess the effectiveness of the investment projects in conditions of uncertainty and risk. In the conditions of the pandemic caused by the COVID-19 virus, as well as frequent uncertain events that cause economic crises and turbulence in the markets, sensitivity analysis and scenario method are certainly again in the forefront when assessing the cost-effectiveness of the projects as a response to increased risk and the need to predict future project outcomes. The result of the research is the necessity and obligation of usage of these analyses and methods for evaluation of all future investment projects, because we are witnesses of negative effects on economy that are caused by pandemic and other uncertain events. The conclusion of the research is that the classical methods for assessing of the effectiveness of investments are no longer allowed and reliable, that is, without sensitivity analysis and scenario methods and some other similar methods it will not be possible to to adequatly assess the investment project. The most important conclusion of the research is that predicting the future and predicting of uncertain events will be in the focus of the theory and practice of the business world. The question that arises is whether the world has reached the phase of globalization where the largest investors are so powerful that they are able to create scenarios according to their will and that they have already made answers and solutions to global problems while accomplishing their own interests.