Question: Hi - I need assistance with this question for homework/studying... Thank you! 6. Sensitivity and scenario analysis Aa Aa Different techniques for analyzing project risk
Hi - I need assistance with this question for homework/studying... Thank you!

6. Sensitivity and scenario analysis Aa Aa Different techniques for analyzing project risk require different Input variables and assumptions. The procedure in which a set of key elements affecting the expected value are changed to study the effect on the expected value is called analysis. Sensitate Scenario Diana is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new project that her company is considering investing in. Her risk analysis report includes the sensitivity curve shown on the graph. P ons of dollars 20 16 Tase Case Units Sold -10 -5 0 5 10 15 20 CHANGE IN UNITS SOLD Perceni This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become negative if the number of units sold decreases by 54. 107. Along with the sensitivity analysis, Diana is including a scenario analysis for the project in her report, giving the probability of the project generating a negative NPV. Her report includes the following information about the scenario analysis: Data Collected Probability z (P;) 0.4 Outcome Pessimistic Most likely Optimistic 0.35 Probability Data for 2 0.03 0.06 0.09 0.3336 0.3228 0.3121 0.2643 0.2546 0.2451 0.2033 0.1919 0.1867 0.1515 0.1446 0.1379 NPV; -$5.62 million $7.94 million $16.45 million 0.30 0.6 0.8 1.0 0.35 Complete the missing information in Diana's report: 6.85m +.93M 2.06m 4.17M The expected net present value of the project is Standard deviation of the nel present value (the NPV of the project is likely to vary by) million 10.17 9.30 9.33 10.68
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