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Conduct the stand-alone risk analysis of the project with the sensitivity analysis and scenario analysis techniques. Explain why sensitivity analysis and scenario analysis can be
Conduct the stand-alone risk analysis of the project with the sensitivity analysis and scenario analysis techniques. Explain why sensitivity analysis and scenario analysis can be useful tools in the capital budgeting decision-making process when economic and financial conditions are likely to change in the future.
WOFST RASE SCENARIO ANAIYSIS \begin{tabular}{|l|c|c|c|} \hline \multicolumn{4}{|c|}{ VEC': Current Market Value eptimal Capital Structure } \\ \hline & & Amount & Weight \\ \hline Bonds & $ & 30,000,000 & 29.9584 \\ \hline Preferred Stock & $ & 10,000,000 & 9,99 \\ Common Equity & $ & 60,080,000 & co.03s \\ Total Market Value & $ & 100,080,000 & 1000000 \\ \hline \end{tabular} \begin{tabular}{|lcc|} \hline \multicolumn{2}{|c|}{} & PREFERESOSTOCK \\ \hline Par Value & $ & 100.00 \\ Annual Dividend & & 9.000K \\ Market Volue & $ & 102.00 \\ Hoatation Cost & & 5.005 \\ \hline \end{tabular} \begin{tabular}{|l|} \hline Fiagd Bivittend 5 \\ \hline Cost of Preferred stoeh 1 \\ \hline \end{tabular} \begin{tabular}{ll} \hline CAPM & 1100N \\ \hline \end{tabular} WOFST RASE SCENARIO ANAIYSIS \begin{tabular}{|l|c|c|c|} \hline \multicolumn{4}{|c|}{ VEC': Current Market Value eptimal Capital Structure } \\ \hline & & Amount & Weight \\ \hline Bonds & $ & 30,000,000 & 29.9584 \\ \hline Preferred Stock & $ & 10,000,000 & 9,99 \\ Common Equity & $ & 60,080,000 & co.03s \\ Total Market Value & $ & 100,080,000 & 1000000 \\ \hline \end{tabular} \begin{tabular}{|lcc|} \hline \multicolumn{2}{|c|}{} & PREFERESOSTOCK \\ \hline Par Value & $ & 100.00 \\ Annual Dividend & & 9.000K \\ Market Volue & $ & 102.00 \\ Hoatation Cost & & 5.005 \\ \hline \end{tabular} \begin{tabular}{|l|} \hline Fiagd Bivittend 5 \\ \hline Cost of Preferred stoeh 1 \\ \hline \end{tabular} \begin{tabular}{ll} \hline CAPM & 1100N \\ \hline \end{tabular} Step by Step Solution
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