Question 3 (25 points): A project needs an investment of $30k at time zero and $15k at the end of year 1. It is expected to generate a net income of $15k for year I to 8. At the end of 8th year, it is expected to incur an environmental cost of $30k and a salvage value of $20k. Please calculate NPV at a minimum DCFROR of 18%. Then evaluate the probability for the project to be economically satisfactory and the most likely NPV to be achieved. Hint: One may analyze the sensitivity NPV to the following parameters and then plot cum probability vs. NPV. - Costs (+/- 40%) . Incomes (+/- 30%) . Salvage value (+/-20%) Environmental Cost (+/- 30%) . Project life (+/- 50%) . Plot a tornado diagram Rank the five uncertain parameters based on the NPV sensitivity analysis Question 3 (25 points): A project needs an investment of $30k at time zero and $15k at the end of year 1. It is expected to generate a net income of $15k for year I to 8. At the end of 8th year, it is expected to incur an environmental cost of $30k and a salvage value of $20k. Please calculate NPV at a minimum DCFROR of 18%. Then evaluate the probability for the project to be economically satisfactory and the most likely NPV to be achieved. Hint: One may analyze the sensitivity NPV to the following parameters and then plot cum probability vs. NPV. - Costs (+/- 40%) . Incomes (+/- 30%) . Salvage value (+/-20%) Environmental Cost (+/- 30%) . Project life (+/- 50%) . Plot a tornado diagram Rank the five uncertain parameters based on the NPV sensitivity analysis