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Question 4 (includes parts a and b below). The most likely cash flows are given below for a new piece of equipment to support a
Question 4 (includes parts a and b below). The most likely cash flows are given below for a new piece of equipment to support a new product. Since this project involves risk, you need to investigate the sensitivity of the decision over the range of + 40% for the capital investment and annual revenues (by 10% intervals). Investment 11,500 5000 Annual revenues Annual costs Salvage Project life 2000 1000 6 (20 points) Use one-at-a-time method and before tax analysis (MARR=10%). Summarize your results in a decision reversal table and a sensitivity plot. Which parameter is more important than the other? Do you advise an investment in the amount of $13,000 and why
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