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1. Answer the following questions a) Assume a discount rate of 15%. What is the overall net present value for the project? Should SSB move
1. Answer the following questions a) Assume a discount rate of 15%. What is the overall net present value for the project? Should SSB move forward with the project and proceed? Explain. b) Assume discoubt rate of 30%. What is the overall net present value for this project? Should SSB move forward? Explain. c) Assume the recurring value of the benefits due to increased sales was overly optimistic and net income due to increased sales is only $500,000 instead if $1,000,000. Assuming a discount rate of 15%, what is the overall net present value abd should SSB move forward with the project? Explain your answer. d) Assume the same as (c) At what discount rate is the project economically feasible? Include 6 decimal places. Should SSB move foward? Yes ve Annual Chew Year 1 Year 20 0,00 0,00 0,00 0,00 $14.00 SL SL 1.00 H SLALOM M INEN LI MU NURUL NI IN IN w WILL BE FLOW RE w HOME ER IN IS HTT WIR w PLES www IN HY 2. LE LILL 195 NA RINN IN NO NEWS w LAN CL ERIFE om TAL ! ' NU M TI LIM RE IRI LI 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% $500,000 $4,375,000.00 $3,397,776.48 $2,550,716.67 $1,813,737.43 $1,170,163.17 $606,105.17 $109,960.61 ($327.992.88) ($715,926.30) ($1,060,727.17) ($1,368.218.14) ($1,643,335.94) ($1,890,278.19) ($2,112,624.21) ($2,313,434.72) ($2,495,334.26) ($2,660,579.55) ($2,811.116.33) ($2,948,626.75) ($3,074,568.93) ($3,190,210.13) $600,000 $700,000 $800,000 $6,375,000 $8,375,000.00 $10,375,000.00 $5,202.332 $7,006,887.08 $8,811,442.37 $4,185,860 $5,821,003.34 $7,456,146.68 $3,301,485 $4,789,232.40 $6,276,979.89 $2,529,196 $3,888,228.44 $5,247,261.08 $1,852.326 $3,098,547.24 $4,344,768.27 $1,256,953 $2,403,944.85 $3,550,936.97 $731,409 $1,790,809.97 $2,850,211.40 $265,888 $1,247,703.19 $2,229.517.93 ($147.873) $764,981.97 $1,677,836.54 ($516,862) $334,494.60 $1,185,850.98 ($847,003) ($50,670.32) $745,662.49 ($1,143,334) ($396,389.46) $350,554.90 ($1,410,149) ($707,673.90) ($5,198.74) ($1,651.122) ($988,808.61) ($326,495.56) ($1,869,401) ($1,243.467.97) ($617.534.82) ($2,067.695) ($1,474,811.37) (5881,927.28) ($2,248,340) ($1,685562.86) ($1,122,786.13) ($2,413,352) ($1,878,077.45) ($1,342,802.80) ($2,564,483) ($2,054,396.50) ($1,544,310.29) ($2,703,252) ($2,216,294.19) ($1,729,336.21) $900,000 $12,375,000 $10,615,998 $9,091,290 $7,764,727 $6,606,294 $5,590,989 $4,697,929 $3,909,613 $3,211,333 $2,590,691 $2,037,207 $1,541,995 $1,097,499 $697.276 $335,817 $8,398 ($289,043) ($560,009) ($807.528) ($1,034,224) ($1,242.378) 000 200 998 290 727 294 989 929 613 333 691 207 995 499 276 817 398 043) 009) 528} 224) 378) $1,000,000 $14.375,000.00 $12,420,552.97 S10.726,433.34 $9,252.474.86 $7,965.326.34 S6.837.210.34 55.844.921.22 54.969.014.25 $4,193.147.41 $3.503.545.67 $2,888.563.72 $2,338.328.12 $1,844.443.62 $1,399.751.58 $998.130.55 $634.331.47 S303.840.90 $2,767.34 ($272.253.50} (5524.137.86) (5755.420.27) $1,100,000 $16.375,000.00 $14,225.108.26 $12,361,576.68 $10,740.222.35 $9,324,358.98 $8,083.431.38 $6,991,913.34 $6,028.415.67 $5,174,962.15 $4,416,400.24 $3,739.920.09 53.134,660.93 $2,591.387.99 $2,102,226.74 $1,660,443.61 $1,260.264.62 S896.724.99 $565.544.07 $263,021.15 ($14,051.65) ($268.462.29) $1,200,000 $1,300,000 $1,400,000 $18,375,000 $20,375,000.00 $22,375,000.00 $16,029,664 $17,834,218.86 $19,638,774.15 $13,996.720 $15,631,863.35 $17,267,006.68 $12.227.970 $13.715,717.32 $15,203.464.80 $10,683.392 $12,042,424.25 $13,401,456.88 $9,329,652 $10575,873.45 $11,822,094.48 $8,138.905 $9,285,897.58 $10.432,889.71 $7,087,817 $8.147.218.52 59.206.619.94 $6,156.777 $7.138.591.63 $8,120,406.37 55.329.255 $6, 242.109.37 $7.154.963.94 $4.591.276 $5,442.632.84 $6,293,989.21 $3.930,994 $4,727.326.55 $5,523,659.36 $3,338,332 $4,085,276.71 $4,832.221.07 $2,804,702 $3.507.177.05 $4,209,652.21 S2322.757 $2,985,069.72 $3,647.382.77 $1,886.198 $2.512.130.92 3,138,064.06 $1,489,609 $2,082.493.17 $2,675.377.26 $1,128.321 $1,691,097.54 $2,253,874.27 $798,296 S1.333.570.45 $1,868,845.10 $496,035 $1,006.120.78 $1,516.206.99 $218.496 $705.453.65 $1,192.411.63 $1,500,000 $24.375,000 $21,443,329 $18,902.150 $16,691,212 $14,760,490 $13,068.316 $11,579,882 $10,266,021 59.102.221 $8,067.819 $7.145.346 $6,319,992 $5,579.165 $4,912.127 $4,309,696 $3,763,997 $3.268.261 $2,816.651 $2.404,120 $2,026,293 S1.679.370 $38 $32 $3c .000 $1,600,000 $1,700,000 $1,800,000 $1,900,000 $2,000,000 000 $26,375,000.00 $28,375,000.00 $30,375,000 $32,375,000.00 $34,375,000.00 329 $23,247,884.75 $25,052,440.04 $26,856,995 $28,661,550.64 $30,466,105.93 150 $20,537,293.35 $22,172,436.69 $23,807,580 $25,442,723.35 $27,077,866.69 212 $18,178,959.78 $19,666,707.26 $21,154,455 $22,642,202.23 $24,129,949.72 490 $16,119,522.15 $17,478,554.79 $18,837,587 $20,196,620.06 $21,555,652.69 316 $14,314,536.55 $15,560,757.58 $16,806,979 $18,053,199.65 $19,299,420.69 882 $12,726,873.95 $13,873,866.07 $15,020,858 $16,167,850.32 $17,314,842.44 021 $11,325,422.79 $12,384,824.22 $13,444,226 $14,503,627.07 $15,563,028.49 221 $10,084,035.85 $11,065,850.59 $12,047,665 $13,029,480.07 $14,011,294.81 819 $8,980,673.07 $9,893,527.64 $10,806,382 $11,719,236.77 $12,632,091.34 346 $7,996,701.95 $8,848,058.32 $9,699,415 $10,550,771.07 $11,402,127.44 992 $7,116,324.99 $7,912,657.80 $8,708,991 $9,505,323.42 $10,301,656.23 165 $6,326,109.80 $7,073,054.16 $7,819,999 $8,566,942.89 $9,313,887.25 127 $5,614,602.52 $6,317,077.68 $7,019,553 $7,722,028.00 $8,424,503.16 696 $4,972,008.88 $5,634,321.94 $6,296,635 $6,958,948.05 $7,621,261.10 997 $4,389,930.36 $5,015,863.51 $5,611,797 $6,267,729.80 $6,893,662.95 261 $3,861,145,44 $4,454,029.53 $5,046,914 $5,639,797.71 $6,232,681.80 651 $3,379,427.74 $3,942,204.47 $4,504,981 $5,067,757.94 $5,630,534.67 120 $2,939,394.40 $3,474,669.05 $4,009,944 $4,545,218.34 $5,080,492.99 293 $2,536,379.42 $3,046,465.63 $3,556,552 $4,066,638.06 $4,576,724.27 370 $2,166,327.57 $2,653,285,55 $3,140,244 $3,627,201.49 $4,114,159.47 Economic Feasibility Sensitivitu. Anak $2,100,000 $36,375,000 $32,270,661 $28,713,010 $25,617,697 $22,914,685 $20,545,642 $18,461,835 $16,622,430 $14,993,110 $13,544,946 $12,253,484 $11,097,989 $10,060,832 $9,126,978 $8,283,574 $7,519,596 $6,825,566 $6,193,311 $5,615,768 $5,086,810 $4,601,117 $27 $24 $21 $19. $17 $15, $14, $13, $11, $10,8 $9,8 $8,9 $8,1 $7,4 $6,7 $6,1 $5,59 $5,08 000,000 ,000.00 ,105.93 ,866.69 ,949.72 ,652.69 420.69 -842.44 _028.49 -294.81 091.34 127.44 656.23 887.25 503.16 261.10 662.95 681.80 534.67 492.99 724.27 159.47 easibility $2,100,000 $2,200,000 $2,300,000 $36,375,000 $38,375,000.00 $40,375,000.00 $32,270,661 $34,075,216.53 $35,879,771.82 $28,713,010 $30,348,153.36 $31,983,296.69 $25,617,697 $27,105,444.69 $28,593,192.18 $22,914,685 $24,273,717.96 $25,632,750.59 $20,545,642 $21,791,862.75 $23,038,083.79 $18,461,835 $19,608,826.68 $20,755,818.80 $16,622,430 $17,681,831.34 $18,741,232.76 $14,993,110 $15,974,924.30 $16,956,739.04 $13,544,946 $14,457,800.47 $15,370,655.04 $12,253,484 $13,104,840.18 $13,956,196.56 $11,097,989 $11,894,321.86 $12,690,654.67 $10,060,832 $10,807,775.97 $11,554,720.34 $9,126,978 $9,829,453.47 $10,531,928.63 $8,283,574 $8,945,887.21 $9,608,200.27 $7,519,596 $8,145,529.24 $8,771,462.39 $6,825,566 $7,418,449.98 $8,011,334.07 $6,193,311 $6,756,088.14 $7,318,864.87 $5,615,768 $6,151,042.29 $6,686,316.94 $5,086,810 $5,596,896.70 $6,106,982.91 $4,601,117 $5,088,075.41 $5,575,033.39 Sensitivitu. Annlinin $2,400,000 $2,500,000 $42,375,000 $44,375,000.00 $37,684,327 $39,488,882.42 $33,618,440 $35,253,583.36 $30,080,940 $31,568,687.15 $26,991,783 $28,350,815.86 $24,284,305 $25,530,525.86 $21,902,811 $227949,803.05 $19,800,634 $20,860,035.61 $17,938,554 $18,920,368.52 $16,283,510 $17,196,364.17 $14,807,553 $15,658,909.30 $13,486,987 $14,283,320.29 $12,301,665 $13,048,609.06 $11,234,404 $11,936,878.95 $10,270,513 $10,932,826.38 $9,397,396 $10,023,328.68 $8,604,218 $9,197,102.25 $7,881,642 $8,444,418.34 $7,221,592 $7,756,866.24 $6,617,069 $7,127,155.34 $6,061,991 $6,548,949.33 Yes ve Annual Chew Year 1 Year 20 0,00 0,00 0,00 0,00 $14.00 SL SL 1.00 H SLALOM M INEN LI MU NURUL NI IN IN w WILL BE FLOW RE w HOME ER IN IS HTT WIR w PLES www IN HY 2. LE LILL 195 NA RINN IN NO NEWS w LAN CL ERIFE om TAL ! ' NU M TI LIM RE IRI LI 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% $500,000 $4,375,000.00 $3,397,776.48 $2,550,716.67 $1,813,737.43 $1,170,163.17 $606,105.17 $109,960.61 ($327.992.88) ($715,926.30) ($1,060,727.17) ($1,368.218.14) ($1,643,335.94) ($1,890,278.19) ($2,112,624.21) ($2,313,434.72) ($2,495,334.26) ($2,660,579.55) ($2,811.116.33) ($2,948,626.75) ($3,074,568.93) ($3,190,210.13) $600,000 $700,000 $800,000 $6,375,000 $8,375,000.00 $10,375,000.00 $5,202.332 $7,006,887.08 $8,811,442.37 $4,185,860 $5,821,003.34 $7,456,146.68 $3,301,485 $4,789,232.40 $6,276,979.89 $2,529,196 $3,888,228.44 $5,247,261.08 $1,852.326 $3,098,547.24 $4,344,768.27 $1,256,953 $2,403,944.85 $3,550,936.97 $731,409 $1,790,809.97 $2,850,211.40 $265,888 $1,247,703.19 $2,229.517.93 ($147.873) $764,981.97 $1,677,836.54 ($516,862) $334,494.60 $1,185,850.98 ($847,003) ($50,670.32) $745,662.49 ($1,143,334) ($396,389.46) $350,554.90 ($1,410,149) ($707,673.90) ($5,198.74) ($1,651.122) ($988,808.61) ($326,495.56) ($1,869,401) ($1,243.467.97) ($617.534.82) ($2,067.695) ($1,474,811.37) (5881,927.28) ($2,248,340) ($1,685562.86) ($1,122,786.13) ($2,413,352) ($1,878,077.45) ($1,342,802.80) ($2,564,483) ($2,054,396.50) ($1,544,310.29) ($2,703,252) ($2,216,294.19) ($1,729,336.21) $900,000 $12,375,000 $10,615,998 $9,091,290 $7,764,727 $6,606,294 $5,590,989 $4,697,929 $3,909,613 $3,211,333 $2,590,691 $2,037,207 $1,541,995 $1,097,499 $697.276 $335,817 $8,398 ($289,043) ($560,009) ($807.528) ($1,034,224) ($1,242.378) 000 200 998 290 727 294 989 929 613 333 691 207 995 499 276 817 398 043) 009) 528} 224) 378) $1,000,000 $14.375,000.00 $12,420,552.97 S10.726,433.34 $9,252.474.86 $7,965.326.34 S6.837.210.34 55.844.921.22 54.969.014.25 $4,193.147.41 $3.503.545.67 $2,888.563.72 $2,338.328.12 $1,844.443.62 $1,399.751.58 $998.130.55 $634.331.47 S303.840.90 $2,767.34 ($272.253.50} (5524.137.86) (5755.420.27) $1,100,000 $16.375,000.00 $14,225.108.26 $12,361,576.68 $10,740.222.35 $9,324,358.98 $8,083.431.38 $6,991,913.34 $6,028.415.67 $5,174,962.15 $4,416,400.24 $3,739.920.09 53.134,660.93 $2,591.387.99 $2,102,226.74 $1,660,443.61 $1,260.264.62 S896.724.99 $565.544.07 $263,021.15 ($14,051.65) ($268.462.29) $1,200,000 $1,300,000 $1,400,000 $18,375,000 $20,375,000.00 $22,375,000.00 $16,029,664 $17,834,218.86 $19,638,774.15 $13,996.720 $15,631,863.35 $17,267,006.68 $12.227.970 $13.715,717.32 $15,203.464.80 $10,683.392 $12,042,424.25 $13,401,456.88 $9,329,652 $10575,873.45 $11,822,094.48 $8,138.905 $9,285,897.58 $10.432,889.71 $7,087,817 $8.147.218.52 59.206.619.94 $6,156.777 $7.138.591.63 $8,120,406.37 55.329.255 $6, 242.109.37 $7.154.963.94 $4.591.276 $5,442.632.84 $6,293,989.21 $3.930,994 $4,727.326.55 $5,523,659.36 $3,338,332 $4,085,276.71 $4,832.221.07 $2,804,702 $3.507.177.05 $4,209,652.21 S2322.757 $2,985,069.72 $3,647.382.77 $1,886.198 $2.512.130.92 3,138,064.06 $1,489,609 $2,082.493.17 $2,675.377.26 $1,128.321 $1,691,097.54 $2,253,874.27 $798,296 S1.333.570.45 $1,868,845.10 $496,035 $1,006.120.78 $1,516.206.99 $218.496 $705.453.65 $1,192.411.63 $1,500,000 $24.375,000 $21,443,329 $18,902.150 $16,691,212 $14,760,490 $13,068.316 $11,579,882 $10,266,021 59.102.221 $8,067.819 $7.145.346 $6,319,992 $5,579.165 $4,912.127 $4,309,696 $3,763,997 $3.268.261 $2,816.651 $2.404,120 $2,026,293 S1.679.370 $38 $32 $3c .000 $1,600,000 $1,700,000 $1,800,000 $1,900,000 $2,000,000 000 $26,375,000.00 $28,375,000.00 $30,375,000 $32,375,000.00 $34,375,000.00 329 $23,247,884.75 $25,052,440.04 $26,856,995 $28,661,550.64 $30,466,105.93 150 $20,537,293.35 $22,172,436.69 $23,807,580 $25,442,723.35 $27,077,866.69 212 $18,178,959.78 $19,666,707.26 $21,154,455 $22,642,202.23 $24,129,949.72 490 $16,119,522.15 $17,478,554.79 $18,837,587 $20,196,620.06 $21,555,652.69 316 $14,314,536.55 $15,560,757.58 $16,806,979 $18,053,199.65 $19,299,420.69 882 $12,726,873.95 $13,873,866.07 $15,020,858 $16,167,850.32 $17,314,842.44 021 $11,325,422.79 $12,384,824.22 $13,444,226 $14,503,627.07 $15,563,028.49 221 $10,084,035.85 $11,065,850.59 $12,047,665 $13,029,480.07 $14,011,294.81 819 $8,980,673.07 $9,893,527.64 $10,806,382 $11,719,236.77 $12,632,091.34 346 $7,996,701.95 $8,848,058.32 $9,699,415 $10,550,771.07 $11,402,127.44 992 $7,116,324.99 $7,912,657.80 $8,708,991 $9,505,323.42 $10,301,656.23 165 $6,326,109.80 $7,073,054.16 $7,819,999 $8,566,942.89 $9,313,887.25 127 $5,614,602.52 $6,317,077.68 $7,019,553 $7,722,028.00 $8,424,503.16 696 $4,972,008.88 $5,634,321.94 $6,296,635 $6,958,948.05 $7,621,261.10 997 $4,389,930.36 $5,015,863.51 $5,611,797 $6,267,729.80 $6,893,662.95 261 $3,861,145,44 $4,454,029.53 $5,046,914 $5,639,797.71 $6,232,681.80 651 $3,379,427.74 $3,942,204.47 $4,504,981 $5,067,757.94 $5,630,534.67 120 $2,939,394.40 $3,474,669.05 $4,009,944 $4,545,218.34 $5,080,492.99 293 $2,536,379.42 $3,046,465.63 $3,556,552 $4,066,638.06 $4,576,724.27 370 $2,166,327.57 $2,653,285,55 $3,140,244 $3,627,201.49 $4,114,159.47 Economic Feasibility Sensitivitu. Anak $2,100,000 $36,375,000 $32,270,661 $28,713,010 $25,617,697 $22,914,685 $20,545,642 $18,461,835 $16,622,430 $14,993,110 $13,544,946 $12,253,484 $11,097,989 $10,060,832 $9,126,978 $8,283,574 $7,519,596 $6,825,566 $6,193,311 $5,615,768 $5,086,810 $4,601,117 $27 $24 $21 $19. $17 $15, $14, $13, $11, $10,8 $9,8 $8,9 $8,1 $7,4 $6,7 $6,1 $5,59 $5,08 000,000 ,000.00 ,105.93 ,866.69 ,949.72 ,652.69 420.69 -842.44 _028.49 -294.81 091.34 127.44 656.23 887.25 503.16 261.10 662.95 681.80 534.67 492.99 724.27 159.47 easibility $2,100,000 $2,200,000 $2,300,000 $36,375,000 $38,375,000.00 $40,375,000.00 $32,270,661 $34,075,216.53 $35,879,771.82 $28,713,010 $30,348,153.36 $31,983,296.69 $25,617,697 $27,105,444.69 $28,593,192.18 $22,914,685 $24,273,717.96 $25,632,750.59 $20,545,642 $21,791,862.75 $23,038,083.79 $18,461,835 $19,608,826.68 $20,755,818.80 $16,622,430 $17,681,831.34 $18,741,232.76 $14,993,110 $15,974,924.30 $16,956,739.04 $13,544,946 $14,457,800.47 $15,370,655.04 $12,253,484 $13,104,840.18 $13,956,196.56 $11,097,989 $11,894,321.86 $12,690,654.67 $10,060,832 $10,807,775.97 $11,554,720.34 $9,126,978 $9,829,453.47 $10,531,928.63 $8,283,574 $8,945,887.21 $9,608,200.27 $7,519,596 $8,145,529.24 $8,771,462.39 $6,825,566 $7,418,449.98 $8,011,334.07 $6,193,311 $6,756,088.14 $7,318,864.87 $5,615,768 $6,151,042.29 $6,686,316.94 $5,086,810 $5,596,896.70 $6,106,982.91 $4,601,117 $5,088,075.41 $5,575,033.39 Sensitivitu. Annlinin $2,400,000 $2,500,000 $42,375,000 $44,375,000.00 $37,684,327 $39,488,882.42 $33,618,440 $35,253,583.36 $30,080,940 $31,568,687.15 $26,991,783 $28,350,815.86 $24,284,305 $25,530,525.86 $21,902,811 $227949,803.05 $19,800,634 $20,860,035.61 $17,938,554 $18,920,368.52 $16,283,510 $17,196,364.17 $14,807,553 $15,658,909.30 $13,486,987 $14,283,320.29 $12,301,665 $13,048,609.06 $11,234,404 $11,936,878.95 $10,270,513 $10,932,826.38 $9,397,396 $10,023,328.68 $8,604,218 $9,197,102.25 $7,881,642 $8,444,418.34 $7,221,592 $7,756,866.24 $6,617,069 $7,127,155.34 $6,061,991 $6,548,949.33
1. Answer the following questions
a) Assume a discount rate of 15%. What is the overall net present value for the project? Should SSB move forward with the project and proceed? Explain.
b) Assume discoubt rate of 30%. What is the overall net present value for this project? Should SSB move forward? Explain.
c) Assume the recurring value of the benefits due to increased sales was overly optimistic and net income due to increased sales is only $500,000 instead if $1,000,000. Assuming a discount rate of 15%, what is the overall net present value abd should SSB move forward with the project? Explain your answer.
d) Assume the same as (c) At what discount rate is the project economically feasible? Include 6 decimal places. Should SSB move foward?
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