Questions
1. Evaluate financial feasibility of the project using
a. Net Present Valueb. IRRc. Modified IRR assuming reinvestment rate of 14%.
2. What is the break-even number of units in terms of the project achieving a zeroNPV?
3. Conduct sensitivity analysis by determining the effect on NPV of the followingchanges:
a. Demand for the new line of components falls by 5%.
b. Selling price per unit of the new line of components falls by 6%.
c. Variable cost per unit of the new line of components increases by 5%.
d. Cost of capital increases to 14%.