A project needs an investment of $30k at time zero and $15k at the end of year 1. It is expected to generate a net income of $15k for year 1 to 8. At the end of 8th year, it is expected to incur an environmental cost of $30k and a salvage value of $20k. 1 Please calculate NPV at a minimum DCFROR of 18%. Then evaluate the probability for the project to be economically satisfactory and the most likely NPV to be achieved. Hint: One may analyze the sensitivity NPV to the following parameters and then plot cum probability vs. NPV. Costs (+/- 40%) Incomes (+/- 30%) Salvage value (+/-20%) Environmental Cost (+/- 30%) Project life (+/- 50%) Plot a tornado diagram Rank the five uncertain parameters based on the NPV sensitivity analysis 1 1 I 1 A project needs an investment of $30k at time zero and $15k at the end of year 1. It is expected to generate a net income of $15k for year 1 to 8. At the end of 8th year, it is expected to incur an environmental cost of $30k and a salvage value of $20k. 1 Please calculate NPV at a minimum DCFROR of 18%. Then evaluate the probability for the project to be economically satisfactory and the most likely NPV to be achieved. Hint: One may analyze the sensitivity NPV to the following parameters and then plot cum probability vs. NPV. Costs (+/- 40%) Incomes (+/- 30%) Salvage value (+/-20%) Environmental Cost (+/- 30%) Project life (+/- 50%) Plot a tornado diagram Rank the five uncertain parameters based on the NPV sensitivity analysis 1 1 I 1