Construct a tornado diagram for the problem

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Question: A friend of yours needs to decide whether or not to invest in a multiyear project. If your friend decides not to invest the project, he or she has nothing to lose or gain. If your friend decides to invest the project, the initial cost is $14,000. The annual revenue is estimated to be $5,000 per year for six years but could vary between $2,500 and $7,000. Your friend estimates that the cost of capital (interest rate) is 11%, but it could be as low as 9.5% and as high as 12%. The basis of the decision to invest will be whether the project has a positive net present value. Construct a tornado diagram for this problem and advice your friend.

Reference no: EM131977242

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