Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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67) A project requires an initial investment of $150. Your research
generates the following estimates of revenues and costs (there are no taxes
): 67) Optimistic Pessimistic 30 20 Revenues Costs Most Likely 50 20 65 15
The cost of capital equals 10 percent. Assume that the cash flows occur in
perpetuity. Conduct a sensitivity analysis of the project's NPV to variations in
costs. (Answers appear in order: [Pessimistic, Most Likely, Optimistic].) A
)-50, +300, +500 B) + 100, +150, +200 C) + 50, 100, +400 D
)-100, 150, + 350
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Transcribed Image Text:67) A project requires an initial investment of $150. Your research generates the following estimates of revenues and costs (there are no taxes ): 67) Optimistic Pessimistic 30 20 Revenues Costs Most Likely 50 20 65 15 The cost of capital equals 10 percent. Assume that the cash flows occur in perpetuity. Conduct a sensitivity analysis of the project's NPV to variations in costs. (Answers appear in order: [Pessimistic, Most Likely, Optimistic].) A )-50, +300, +500 B) + 100, +150, +200 C) + 50, 100, +400 D )-100, 150, + 350
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