Briefly describe three tools used to analyze the risk associated with capital projects (ie, perform risk analysis).

For the project below, calculate the following:

1. Net Present Value (Show your work using the financial calculator)
2. Internal Rate of Return (Show your work using the financial calculator)
3. The probability of the project having a -NPV. (Show your work)

Assume the NPV you calculate is the Average NPV

= $6500

k = 12%

	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Revenues		12,050	15,700	17,450	12,300	25,000
Variable Expenses		(4,000)	(7,000)	(8,000)	(4,000)	(12,000)
Fixed Expenses		(3,000)	(3,000)	(3,000)	(3,000)	(3,000)
Depreciation		(1,000)	(1,000)	(1,000)	(1,000)	(1,000)
EBIT		4,050	4,700	5,450	4,300	9,000
Tax (35%)		1,418	1,645	1,908	1,505	3,150
Net A/Tax		2,633	3,055	3,543	2,795	5,850
add Depreciation		1,000	1,000	1,000	1,000	1,000
Opn Cash Flows		3,633	4,055	4,543	3,795	6,850
Change in Working Capital	(3,000)	0	0	(500)	0	3,500
Fixed Asset Needs	(5,000)					1,500
Total OPN CF	(8,000)	3,633	4,055	4,043	3,795	11,850