1. (1pt) Define opportunity cost. What is the opportunity cost of you attending class? In the context of capital budgeting, what is an opportunity cost? 2. (1pt) What is erosion in the context of capital budgeting? Provide an example. 3. (1pt) Define sunk cost. What are some sunk costs associated with your college education? Provide an example of a sunk cost in capital budgeting 4. (1pt) Compare and contrast sensitivity analysis and scenario analysis 5. (6pts) Download the accompanying Excel file. Perform both a scenario analysis and a sensitivity analysis using the provided information. Answer the following questions using your results a. What is NPV in the base case scenario? What does the b. What is NPV in the worst case scenario? The best case c. Assume the probability of each scenario is equal. What d. Provide a graph evaluating NPV in the base case with e. Provide a graph evaluating NPV in the base case with f. What is the breakeven starting price in the base case? base case represent? scenario? is the average NPV? different starting prices different starting yields Breakeven starting yield