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A project has an initial investment of 80. You have come up with the following estimates of the projects cash flow (there are no taxes)
A project has an initial investment of 80. You have come up with the following estimates of the projects cash flow (there are no taxes)
pessimistic Most likely optimistic
revenue 12 18 22
cost 8 8 8
Suppose the cash flow is perpetuities and the required rate of returns is 10%. Conduct a sensitivity analysis of the project NPV to variations in revenue. And provide you answers in the following order : pessimistic, most likely, optimistic
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