(1) What is sensitivity analysis? (2) Perform a sensitivity analysis on the unit sales, salvage value, and...

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(1) What is sensitivity analysis?
(2) Perform a sensitivity analysis on the unit sales, salvage value, and cost of capital for the project. Assume each of these variables can vary from its base-case, or expected, value by ±10%, ±20%, and ±30%. Include a sensitivity diagram, and discuss the results.
(3) What is the primary weakness of sensitivity analysis? What is its primary usefulness?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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