Professional Documents
Culture Documents
Methods
4 Methods in Chapter 9:
Payback
Net Present Value
Profitability Index
Internal Rate of Return
Payback Method
Profitability Index
Scenario Analysis
Sensitivity Analysis
Risk Adjusted Discount Rates
Scenario Analysis
Sensitivity Analysis
What if analysis
Change one variable by a certain %.
Hold other variables constant.
Recalculate NPV, PI, or IRR. Look at %
change in NPV, PI, or IRR.
Identifies which variables have biggest
impact on success/failure of project
Purpose of RADR
Example of RADR