Rationale and Application of TaxOffsetting Effectin Sensitivity Analysis

The current method on sensitivity analysis is simple and functional, but there is an overestimated risk for projects pessimistically. This paper proposed a new conception in terms of taxoffsetting effect. After the rationale of taxoffsetting effect was analyzed systematically, a method to determine its coefficients was given for improving the current methodology on sensitivity analysis. The improved method results in a coincidence with real condition, and is simple enough for application.