PROBLEMS

$13-1.$ A certain potential investment project is critical to a firm. The following are "best" or

"most likely" estimates:

It is desired to show the sensitivity of a measure of merit $($net annual worth$)$ to

variation, over a range of $+-50\%$ of the expected values, in the following elements: $($a$)$ life,

$($b$)$ net annual cash flow, $($c$)$ interest rate. Graph the results. To which element is the deci$-$

sion most sensitive$?$

$13\mathrm{.}2$