Question: c) Think about changes that happen in a project once it has been accepted and moving forward. Here are 3 potential scenarios. For each, describe

 c) Think about changes that happen in a project once it
has been accepted and moving forward. Here are 3 potential scenarios. For

c) 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 the 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. i. Your workforce voted in a new union, raising wages for nlost line-workers. There has been no change in your product pricing or other expenses/revenue projections. ii. Once construction began on the project, a rare black-footed ferret was found nearby. Environmental groups demand that the project halt operations for 9 months while the ferrets are found and relocated. Once the ferrets were moved, operations continued as originally planned, but with all cash flows shifted out by 9 months. TICAL APPLICATION 2 iii. Due to a (lucky) miscalculation by the marketing folks, demand for your project's products has increased in the early years of the project, but that "stole" sales from future years. The same total inflows were achieved, but the timing was more front-loaded than anticipated

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!