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This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become negative if the number
This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become negative if the number of units sold
decreases by
Along with the sensitivity analysis, Taliba is including a scenario analysis for the project in her report, giving the probability of the project generating a
negative NPV Her report includes the following information about the scenario analysis:
Data Collected
Probability Data for z
Complete the missing information in Taliba's report: Note: Round your answers to two de
The expected net present value of the project is
Standard deviation of the net present value the NPV of the project is likely to vary by $
million.
Assuming that probability distribution is normal, the value of is
Thus, the project has a
chance to generate an NPV of less than $
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