What type of analysis does a 1D sensitivity table provide?

Prepare for the ESCP Real Estate Finance Test with interactive questions and detailed explanations. Boost your understanding of key concepts and get ready to excel in your exam!

A 1D sensitivity table focuses on single-variable analysis, examining the impact of changing one specific variable on the outcome of a financial model or analysis. This type of analysis is particularly useful in real estate finance, where it allows stakeholders to understand how fluctuations in key inputs—such as interest rates, property values, or rental income—can affect financial metrics like cash flow or return on investment.

By isolating one variable at a time, a 1D sensitivity table simplifies the analysis, making it clearer to identify trends and the extent of potential changes in financial projections. This helps decision-makers to assess risk, plan for different scenarios, and make informed choices based on the sensitivity of their outcomes to specific changes in inputs. In contrast, the other types of analysis mentioned would involve multiple variables or different approaches that fall outside the scope of a 1D sensitivity table.

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