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1. Identification of all those variables which have an influence on the projects NPV.
2. Definition of the underlying (mathematical) relationship between variables.
3. Analysis of the impact of the change in each of the variables on the projects NPV.
Kavungya answered the question on April 13, 2021 at 09:24
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Year Cash flow
1 12,000
2 14,000
3 10,000
4 6,000
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α0 = 1.00
α1 = 0.90
α2 = 0.70
α3 = 0.50
α4 = 0.30
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Year Cash Abandonment
flow value
Sh`000' Sh`000'
0 (4,800) 4,800
1 2,000 3,000
2 1,875 1,900
3 1,750 0
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