Project #35269 - Assignment

NPV and Sensitivity Analysis

Assume a project has the following forecasted cash flows:

Year
Amount in $
0
-4,000
1
500
2
400
3
600
4
500
5
750

Answer the following:

  • Assuming that a project has a discount rate of 10 percent, calculate its NPV. Should the project be accepted?
  • Conduct a sensitivity analysis. Should the project be accepted now? Why?

Submit your answers in a 2- to 3-page Microsoft Word document and your calculations in a Microsoft Excel sheet.

Grading Criteria
Maximum Points
Determined the project's NPV, assuming a discount rate of 10 percent, and analyzed if the project should be accepted.
25
Accurately conducted a sensitivity analysis and determined if the project should be accepted.
25
Presented a structured document free of spelling and grammatical errors.
5
Properly cited sources using the APA format.
5
Total:
60
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Subject Mathematics
Due By (Pacific Time) 07/25/2014 12:00 pm
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