Conducting Sensitivity and Analysis and Mitigating Risk

This week your team will calculate the net present value break-even point for each project and suggest ways management can mitigate the risk for each project.

1. Open the Excel spreadsheet from the prior week and copy your information to a new tab.
2. Label this new tab in the spreadsheet Sensitivity Analysis.
3. Pick at least two variables in the spreadsheet to flex by 5% up and down (for variables that cover more than one year please remember to change all years). Move these variables up 5% and recorded the new net present value. Take the difference between the new net present value and the original net present value and divide by the original net present value to get the percentage change in net present value. Record what you changed and the percentage change in net present value.

The part above is done,I'm attaching screenshots of it. I need help with the part below.

The 5% increase and decrease have been completed for both projects. I also calculated the percentage change in NPV. There are 4 highlighted rows on each of the four pages.

1. Use the first paragraph to discuss the first variable that your team "flexed". Please describe the variable, the percentage change in the variable (if different than 5%), and the percentage change in the net present value as a result of the change. Remember to note if it is a decrease or increase in Net Present Value. Use a second paragraph to describe the projects sensitivity to the second variable.
2. The next two paragraphs should discuss two actions that your group believes management can do to mitigate the risk of this project.

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