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Consider the following cash flow for an investment: 4 Year 2 3 5 L = 50,000 C 100,000 =25,000 | |=25,000 |=25,000| I=25,000| |=25,000| |-25,000
Consider the following cash flow for an investment: 4 Year 2 3 5 L = 50,000 C 100,000 =25,000 | |=25,000 |=25,000| I=25,000| |=25,000| |-25,000 C: Cost, l: Income, L: Salvage Value Assume the 10% minimum rate of return (discount rate) and evaluate the sensitivity of the project NPV to 25% and 50% increase and decrease in: 1. Initial investment 2. Annual income 3. Salvage value 4. Interest rate 5. Draw the tornado graph and rank above 4 inputs based on NPV sensitivity analysis o
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