a$.$ What are the key sources of risk that you see in this project?

The "given" data or parameters capture the variables that are uncertain in the analysis. However, the sensitivity analysis is designed to identify the key sources of uncertainty that are most crucial.

b$.$ Breakeven sensitivity analysis

"Estimated

Value" "Breakeven

Value" "Percent

Difference"

Variable

Initial Capex

Variable Cost as a $\%$ of Sales $49\%$

Working Capital $\%$ of new Sales $27\%$

Sales volume multiplier $10\mathrm{.}92$

c$.$ Discuss results of part b$.$

d$.$ Should you always seek to reduce project risk?