The answer is provided in

http://www.chegg.com/homework-help/managers-company-considering-investment-following-estimated-chapter-11-problem-14p-solution-9780133750218-exc

for a) and b)

I wonder how to do c)

The managers of a company are considering an investment with the following estimated cash flows. MARR is 15% per year. 1. Capital investment Annual revenues Annual expenses Market value Useful life $30,000 S20,000 $5,000 $1,000 years The company is inclined to make the investment; however, the managers are nervous because all of the cash flows and the useful life are approximate values The capital investment is known to be within 5%. Annual expenses are known to be within 10%. The annual renevue, market value, and useful life estimates are known to be within 20% a. Analyze the sensitivity of PW to changes in each estimate individually. Based on your results, make a recommendation regarding, whether or not they should proceed with this project. Graph your results for presentation to management. b. The company can perform market research and/or collect more data to improve the accuracy of these estimates, Rank these variables bv ordering them in accordance with the need for more accurate estimates (from highest need to lowest need c. Consider two most sensitive variables and do scenario analysis. You can set three cases for each variable (using current estimate for the base case, and the bounds for the pessimistic and optimistic case). Clearly mark those scenarios with negative PW