a$)$ Think about changes that happen in a project once it has been accepted and moving forward. Here are $3$ potential scenarios. For each, describe what you expect to happen to a project's expected NPV$,$ and WHY that is your expectation. $(2$ pts for each of the following$).$

As MBA students, just being able to calculate NPV isn$$t sufficient. You should be able to consider what the effects of various market or project changes on the project$$s viability.

LOOK AT EACH SITUATION INDIVIDUALLY AND ASSUME THAT THERE ARE NO OTHER CHANGES FOR THE FIRM.

i$.$ Your firm has a project that has been tentatively accepted for development, assuming a required rate of return of $13\%.$ That required rate of return was estimated over a year ago, before the FED began its interest rate hikes. The risk free rate has increased by $\mathrm{.}5\%$ from that used in the original projection.

ii$.$ Your firm recently acquired a company that has a new technology that will extend the life of a current project by $5$ years. The project had an expected remaining life of $5$ years, now the remaining life is $10$ more years, with original forecast annual cash flows of $$250,000$ per year remaining steady over the full time period.

iii. It has just been discovered that the site of one of your firm$$s projects will require a major cleanup and remediation at the end of the project$$s life $($in $5$ years$).$