Question: NPV = 115588.9. Please calculate NPV at a minimum DCFROR of 15%. Then evaluate the probability for the project to be economically satisfactory and the

NPV = 115588.9. Please calculate NPV at a minimum DCFROR of 15%. Then evaluate the probability for the project to be economically satisfactory and the most likely NPV to be achieved. Hint: One may analyze the sensitivity NPV to the following parameters and then plot probability vs. NPV. Costs (+/- 40%) Incomes (+/- 30%) Salvage value (+/-20%) Environmental Cost (+/- 30%) Project life (+/- 50%) Plot a tornado diagram Rank the five uncertain parameters based on the NPV sensitivity analysis

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!