Question
ABC Home Health is considering opening an office in a new market. The organization hasidentified the number of home visits, revenue per home visit, and
ABC Home Health is considering opening an office in a new market. The organization hasidentified the number of home visits, revenue per home visit, and the level of fixed costs ofthe new office as being the major sources of uncertainty in the investment decision. To get abetter understanding of the sensitivity of the new office NPV to these variables, the following data have been assembled:
Change NPV
from Number Revenue Level of
base of home per home fixed
case visits visit costs
-30% -$814 -$57 $82
-20% -$515 -$11 $82
-10% -$216 $36 $82
0% $82 $82 $82
10% $381 $129 $82
20% $680 $176 $82
30% $979 $222 $82
I need to construct a graph to show the sensitivity of the new office NPV to each variable.
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