Unformatted text preview: capital is downward sloping, because a higher cost of capital leads to a lower NPV. C. The plot of unit sales is much steeper than that for salvage value. This indicates that NPV is more sensitive to changes in unit sales than to changes in salvage value. D. Steeper sensitivity lines indicate greater risk. Thus, in comparing two projects, the one with the steeper lines is considered to be riskier. Mini Case: 12 - 22...
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- Spring '08
- 2003 albums, base case, sensitivity lines