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10. Perform sensitivity analysis on the following project by first finding the NPV for the base case, then for a 10% decline in quantity sold
10. Perform sensitivity analysis on the following project by first finding the NPV for the base case, then for a 10% decline in quantity sold and a 10% increase in quantity sold. Investment = $200,000 Straight line depreciation over 2 years No Salvage Value quantity sold per year = 20,000 Price per unit = $50 at Time 0 2% inflation rate each year of the two years Operating Cost = $20 per unit (all variable) at Time 0 1% inflation rate per year Tax rate 25% cost of capital 10% Project will have a 2 year life
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