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Conduct a sensitivity analysis of the project NPV

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Reference no: EM132849722

Question - A project has an initial investment of 100. You have come up with the following estimates of the project's cash flows (there are no taxes):

 

Revenues

Costs

Pessimistic

15

8

Less likely

17

8

Most likely

20

8

Optimistic

25

8

Suppose the cash flows are prepetuities and the cost of capital is 10%. Conduct a sensitivity analysis of the project's NPV to variations in revenues. Match your answers with the four relevant conditions (pessimistic, less likely, Mostly, Optimistic).

Reference no: EM132849722

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