the qustion in the picture below

a) Do you think that project is economically attractive considering the data given? Explain your answer with your calculations.

b) Determine the breakeven percentage change of initial investment.

c) Analyze the sensitivity of the PW to changes in initial investment, annual revenue and market value.

d) Using your finding in b, draw spiderplot (/sensitivity graph) in Excel. If you are not able to do it in Excel, hand drawing plots will be accepted as well. However, their accuracy is your responsibility.

e) Identify the factor that PW is the most sensitive to the changes.

f) Identify the decision reversal points in the spiderplot if they are included in your drawing for each factor considered.

g) If initial investment increases by 5%, do you think that the project will be economically attractive anymore?

2. (60%) The cash flow estimates of an investment project are shown below. Use an interest rate of 8% per year. Sensitivity Range 10% +10% Item Initial investment Annual revenue Annual expense Market value Project life, years Estimated Cash Flows $30,000 $7500 $3000 $5000 8 +10%