please be Sure, don\'t just guess it and explain why. A) I already know it\'s Sa

Question

please be Sure, don't just guess it and explain why.
A) I already know it's Salvage Value
B) Is Intial Value
Don't know C, D and E very well.

8. SENSITIVITY GRAPH A) Based on the sensitivity graph, the analysis is least sensitive to changes in which component? B) The analysis is most sensitive to changes in which component? C) A_% increase/decrease in initial investment (INIT INV) would make the project unattractive. D) The area above the x-axis represent 53 022 projects. E)A-% increase/decrease in annual revenue (ANN REV) would make the project unattractive.

Explanation / Answer

The most sensitive would be the one which is steepest or has the highest slope hence Initial Value is the most sensitive

The least sensitive would be the one which is most flat or has the lowest slope hence Salvage Value is the least sensitive

The area above x-axis is porjects whose NPV is more or greater than zero and hence they should be accepted..Hence, area above x-axis represent acceptable projects

A 5% Decrease in annual reveniue would make the project unattractive

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