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14. Yong Importers, an Asian import company, is evaluating two
mutually exclusive projects, A and B. The relevant cash flows for
each project are given in the table below. The cost of capital for use
in evaluating each of these equally risky projects is 10 percent.
Project A Project B
Initial Investment $350,000 $425,000
Year Cash Inflows (CF)
The NPVs of projects A and B are ________.
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FIN 419 Week 1 DQ 1
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What is a sensitivity analysis?
What is a scenario analysis?
How would you apply each one to a potential investment
opportunity?
How would you use the information from this analysis? Explain.
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