You Calculate the Following Estimates of Project Cash Flows (There

question 33

Multiple Choice

You calculate the following estimates of project cash flows (there are no taxes) : $\begin{array} { | l | c | c | c | } \hline & \text { Pessimistic } & \text { Mast Likely } & \text { Optimistic } \\\hline \text { Investment } & 100 & 80 & 60 \\\hline \text { Revenues } & 30 & 40 & 50 \\\hline \text { Costs } & 20 & 15 & 10 \\\hline\end{array}$ The revenues and costs occur in perpetuity.The cost of capital is 8 percent.Conduct a sensitivity analysis of the project's NPV to variations in costs.(Answers appear in order: [Pessimistic, Most Likely, Optimistic].)

• A)+170.00, +232.50, +295.00
• B)-100.00, +500.00, +800.00
• C)-90.00, -55.00, -20.00
• D)-88.33, -50.00, -18.50

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