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

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

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

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

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

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