Question: Sensitivity analysis Consider the data in Exercise 7.4 and the solution to Exercise 7.5. Sales forecasts could vary each year by plus or minus 20%.

Sensitivity analysis Consider the data in Exercise 7.4 and the solution to Exercise 7.5. Sales forecasts could vary each year by plus or minus 20%. Sales prices could vary by plus or minus 10%, as could variable costs per unit.

Required:

Compute the sensitivity of the project’s net present value to each of these three factors at their high and low values.

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