4. (15 points) Consider the following three scenarios for a project. a) Write an equation, but DO NOT solve, for the Annual Worth (AW) of the identified cell in the table below assuming all other factors remain at their optimistic values. (5 points) b) Determine the sensitivity of the AW to +20% changes in Net Cash Flow in the optimistic scenario. Interpret the result. (10 points) Capital Investment Annual Revenues Annual Expenses Market Value Useful Life MARR Pessimistic (Pess) $650,000 70,000 50,000 10,000 7 years 10% Most Likely (ML) $500,000 85,000 45,000 20,000 12 years 15% Optimistic (Opt) 450,000 98,000 42,000 30,000 18 years 18% Opt Annual Expenses Pess ML MARR ML Opt Pess ML Opt Pess Pess ML Opt Pess Market Value ML Capital Investment Pessimistic Most Likely Optimistic Pessimistic Most Likely Optimistic Pessimistic Most Likely Optimistic Opt 4. (15 points) Consider the following three scenarios for a project. a) Write an equation, but DO NOT solve, for the Annual Worth (AW) of the identified cell in the table below assuming all other factors remain at their optimistic values. (5 points) b) Determine the sensitivity of the AW to +20% changes in Net Cash Flow in the optimistic scenario. Interpret the result. (10 points) Capital Investment Annual Revenues Annual Expenses Market Value Useful Life MARR Pessimistic (Pess) $650,000 70,000 50,000 10,000 7 years 10% Most Likely (ML) $500,000 85,000 45,000 20,000 12 years 15% Optimistic (Opt) 450,000 98,000 42,000 30,000 18 years 18% Opt Annual Expenses Pess ML MARR ML Opt Pess ML Opt Pess Pess ML Opt Pess Market Value ML Capital Investment Pessimistic Most Likely Optimistic Pessimistic Most Likely Optimistic Pessimistic Most Likely Optimistic Opt