Question: A company is using sensitivity analysis to analyse the risk of a two year investment opportunity. The following cash flow model is available: Net cash

 A company is using sensitivity analysis to analyse the risk of

A company is using sensitivity analysis to analyse the risk of a two year investment opportunity. The following cash flow model is available: Net cash Year Capital expenditure Revenue Costs flow 0 (90,000) (90,000) 1 180,000 111,600 68,400 2 180,000 111,600 68,400 The relevant discount rate used is 13% and the net present value of the project has been calculated as 24,098. Is this project sensitive to changes in revenue? The project is sensitive at both the 5% level and the 10% level. The project is not sensitive to changes in revenue. The project is sensitive at the 10% level, but not at the 5% level. The project is sensitive at the 5% level, but not at the 10% level

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