(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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1 Sens itivity analysis is a method of analyzing how changes in the inputs of a model affect the out...View the full answer
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Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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