Question: Using the sample project from this chapter, perform a sensitivity analysis (+/-10 basis-points) of r's effect on IRR, starting from its base value for this

Using the sample project from this chapter, perform a sensitivity analysis (+/-10 basis-points) of r's effect on IRR, starting from its base value for this project of 9.40 percent. Which of the following statements is true?

a. IRR for this project is indifferent to changes in r.

b. IRR for this project is more sensitive to increases in r than to decreases.

c. IRR for this project is more sensitive to decreases in r than to increases.

d. IRR is equally sensitive to both increases and decreases.

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