1) What is an easy way of checking the vulnerability of a project s profitability to variations in project assumptions?

2) What are the shortcomings of this check?

3) Risk analysis allows a fuller examination of project risk. Describe risk analysis in a few words.

4) When is risk analysis, in addition to sensitivity analysis, particularly relevant and when not?

5) Suppose a decision in favor of a project is taken based on an expected NPV of 100 million What needs to be calculated to determine the risk that this decision might turn out to be a mistake?

6) Suppose a project with an expected NPV of 500 million involves a probability of 20% that the NPV will turn out to be negative. What would one need to know to analyze whether this is a worthwhile investment?