3. Gregg wants to analyze the risk of the project using sensitivity analysis and Monte Carlo simulation. a. Explain to Baldwin Inc. how the two risk analysis models can be used to analyze risk of the project.

4. Gregg has estimated the fixed costs (including depreciation) of the Ohio project to be $1.5 million, sales price is $130, and the variable cost is $70, giving a contribution margin of $60. What is the break-even quantity for this project?

5. Baldwin Inc. wants to know the likely effect of the capital budgeting decision on its stock price (increase, decrease, no change, or not sure). Choose one and explain why.