The example below calculates the NPV and IRR for an investment.

a. Create a one-dimensional data table showing the sensitivity of the NPV and IRR to the year 1 cash flow (currently $10,000). Use a range of $9,000 to $12,000 in increments of $500.

b. Create a two-dimensional data table showing the sensitivity of NPV to the year 1 cash flow and to the discount rate. Use the same range for the cash flow as above and use discount rates from 8% to 20%, with increments of 2%.

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1 A Discount rate 2 Cost 3 Cash flow growth Year B 15% 50,000 6% Cash flow 456789 0 1 2 (50,000.00)