Tesla Company uses a 12% hurdle rate for all capital expenditures. It screens investments using three evaluation techniques: the net present value, the profitability index and the internal rate of return. It has lined up four projects with the following information. Projects in thousands A B C D 400 596 496 544 Initial cash outflow Annual cash inflows Year 1 2 140 130 200 160 190 270 190 250 180 180 180 3 4 130 160 120 If Tesla Company has a capital budget of P1,500,000, what projects should be pursued base on the three criteria? Show necessary computations on your solution. (Present the projects to be accepted with the highest IRR to the least IRR (CAPITAL LETTER ONLY WITH NO SPACES PROVIDED (EX: A-B-C-D)

Payback is best used to evaluate which types of project

How can we determine the Incremental Analysis for Cost-Only Projects?a

Explain the concept of sensitivity analysis as determined by NPV Breakeven sensitivity.  How is it measured and what insights does it provide about the risk of a project?   Goal seek can be used to evaluate the NPV breakeven of an input.  What needs to happen next in order to evaluate and interpret the results?  How do we know whether the results suggest that an input adds a little, or a lot, of risk relative to a project?