V4

Q1. Sensitivity Analysis a. [2pts] Create a 1-variable Data table where the input is the sales growth rate, and the output is the NPV. The sales growth rate should increase from 7.5% to 12% with a constant increment of 0.5%. Assume no correlation between any value drivers. b. [2 pts] Create a 2-variable Data table where the inputs are the sales growth rate and the discount rate, and the output is the NPV. The sales growth rate should increase from 7.5% to 12% with a constant increment of 0.5% and the discount rate should have the following values; 11%, 11.5%, 12%, 12.75%, 13.25%, 14%, 14.5%. Assume no correlation between any value drivers. Do you have any negative NPVs? If so, how many cases? Q2. Simulation [3 pts] Now report the distribution of the internal rate of return of the project (the name of the distribution that fits the outcome the best based on AIC). Also, report the major statistics - mean, min, max, standard deviation, and the graph of the distribution. Finally, report the probability that the internal rate of return of the project is great than 15%. (Choose your own number of simulation iterations. Assume no correlation between any value drivers. Further assume there is no "decision" variable, l.e., no need to utilize the "RiskSimTable" function.)