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General Electric evaluates a new project with an initial investment of $15,000,000, expected cash flows: Year 1 $3,000,000, Year 2 $4,000,000, Year 3 $5,000,000, discount
- General Electric evaluates a new project with an initial investment of $15,000,000, expected cash flows: Year 1 $3,000,000, Year 2 $4,000,000, Year 3 $5,000,000, discount rate 12%.
- Requirements:
- Calculate the net present value (NPV) of the project.
- Conduct a sensitivity analysis on cash flows and the discount rate.
- Determine the probability distribution of NPV.
- Discuss the risk-adjusted discount rate and its impact on investment decisions.
- Requirements:
- Calculate the net present value (NPV) of the project.
- Conduct a sensitivity analysis on cash flows and the discount rate.
- Determine the probability distribution of NPV.
- Discuss the risk-adjusted discount rate and its impact on investment decisions.
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Advanced Engineering Mathematics
Authors: Erwin Kreyszig
10th edition
470458364, 470458365, 978-0470458365
