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EFG Corporation is considering two investment opportunities, Investment E and Investment F, with the following parameters: Investment E: Cost of Capital - 8%, Initial Investment

EFG Corporation is considering two investment opportunities, Investment E and Investment F, with the following parameters:

  • Investment E: Cost of Capital - 8%, Initial Investment - $350,000, Cash Inflow Year 1 - $80,000, Cash Inflow Year 2 - $100,000, Cash Inflow Year 3 - $120,000
  • Investment F: Cost of Capital - 9%, Initial Investment - $400,000, Cash Inflow Year 1 - $90,000, Cash Inflow Year 2 - $110,000, Cash Inflow Year 3 - $130,000 Perform a sensitivity analysis for Investment E and Investment F by varying the discount rate by ±1%. Assess the impact of changes in the discount rate on the net present value and recommend the most resilient investment option.

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