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5 - 2 . The increment to sales volume resulting from a change in terms of sale is always uncertain. Investigate the sensitivity of your

5-2. The increment to sales volume resulting from a change in terms of
sale is always uncertain. Investigate the sensitivity of your answer
to Problem 1 by recalculating the net present value of the proposed
policy for initial sales volumes of $1.1 million, $1.2 million, $1.25
million, $1.3 million, $1.35 million, and $1.4 million. Assume that
these sales amounts do not require any other capital expenditures
beyond the $40,000 amount to be spent in the first year, and do
not affect the salvage value of this expenditure. How does this
analysis influence your conclusions with respect to the adoption of
the proposed terms of sale change?
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