How sensitive is the npv to the different inputs

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Reference no: EM132166364

Answer the following Question :

1. Based on the base case scenario and the two alternative downside possibilities, is this invest- ment economically attractive?

2. What benefit can Monte Carlo simulation add to Joe and Mick's understanding of the eco- nomic benefits of the Little Judson Prospect?

3. Incorporate uncertainties into the spreadsheet using Crystal Ball. What do the Monte Carlo results reveal? What is the probability that the NPV will be greater than zero? How sensitive is the NPV to the different inputs?

4. Think about the proper discount rate-should it be adjusted now that much of the risk has been modeled explicitly with Crystal Ball? Should Mick invest?

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Reference no: EM132166364

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