A Project Has an Initial Investment of 100 Suppose the Cash Flows Are Perpetuities and the Cost of Up

Multiple Choice

A project has an initial investment of 100.You have come up with the following estimates of the project's cash flows (there are no taxes) : $\begin{array} { | l | c | c | c | } \hline & \text { Pessimistic } & \text { Mast Likely } & \text { Optimistic } \\\hline \text { Revenues } & 15 & \mathbf { 2 0 } & \mathbf { 2 5 } \\\hline \text { Costs } & 10 & 8 & 5 \\\hline\end{array}$ Suppose the cash flows are perpetuities and the cost of capital is 10 percent.Conduct a sensitivity analysis of the project's NPV to variations in revenues.(Answers appear in order: [Pessimistic, Most Likely, Optimistic].)

A) -30, +20, +70.
B) -100, -50, +80.
C) -50, +50, +70.
D) +5, +11, +18.