5.10. A friend of yours can invest in a multiyear project. The cost is $14,000.

Annual cash flows are estimated to be $5,000 per year for six years but

could vary between $2,500 and $7,000. Your friend estimates that the cost

of capital (interest rate) is 11%, but it could be as low as 9.5% and as high

as 12%. The basis of the decision to invest will be whether the project has a

positive net present value. Construct a tornado diagram for this problem.

On the basis of the tornado diagram, advise your friend regarding either

(1) whether to invest or (2) what to do next in the analysis.