B. Problem Statement (30 questions) Business is thriving and, as a result, the Soho Paving Company is contemplating the purchase of additional landscaping equipment. While the Company has done the necessary due diligence, it is doubtful that the investment would perform exactly as projected by the dealership consultant. Due to lingering uncertainty, you have been mandated by the Company to perform a one-way sensitivity analysis of your potential purchase. The current best" guesses for the project parameters are: . 1. Initial Cost (P) = $960,000 2. Salvage value (SV) = $12,133 3. Annual operating revenues (AOR) = $600,000 4. Annual operating costs (AOC) = $325,000 5. Economic life (N) = 5 years 6. MARR = 10% 7. Inflation Rate = 0%. One-way Sensitivity Table Net Present Worth (NPW). Parameters -15% -10% -5% +5% +10% +15% Reference Scenario P BB CC AOR DD EE AOC FF GG HH SV = JJ KK N LL MM MARR NN oo PP 8. The dollar value of cell HH is 9. The dollar value of cell ll is 10. The dollar value of cell JJ is 11. The dollar value of cell KK is 12. The dollar value of cell LL is 13. The dollar value of cell MM is 14. The dollar value of cell NN is 15. The dollar value of cell OO is 16. The dollar value of cell PP is 17. The most influential parameter (P, AOR ...) on the project's NPW in the - 15% to +15% range is 18. The second (2nd) most influential parameter on the project's NPW in the --15% to +15% range is 19. If you plotted a spider diagram instead of completing a sensitivity Table for any project, the third most influential project parameter would have a) the curve with the third steepest positively or negatively sloped curve. b) the third steepest positively sloped curve. c) the third steepest negatively sloped curve. d) it is impossible to determine project sensitivity to its parameters from the spider diagram. B. Problem Statement (30 questions) Business is thriving and, as a result, the Soho Paving Company is contemplating the purchase of additional landscaping equipment. While the Company has done the necessary due diligence, it is doubtful that the investment would perform exactly as projected by the dealership consultant. Due to lingering uncertainty, you have been mandated by the Company to perform a one-way sensitivity analysis of your potential purchase. The current best" guesses for the project parameters are: . 1. Initial Cost (P) = $960,000 2. Salvage value (SV) = $12,133 3. Annual operating revenues (AOR) = $600,000 4. Annual operating costs (AOC) = $325,000 5. Economic life (N) = 5 years 6. MARR = 10% 7. Inflation Rate = 0%. One-way Sensitivity Table Net Present Worth (NPW). Parameters -15% -10% -5% +5% +10% +15% Reference Scenario P BB CC AOR DD EE AOC FF GG HH SV = JJ KK N LL MM MARR NN oo PP 8. The dollar value of cell HH is 9. The dollar value of cell ll is 10. The dollar value of cell JJ is 11. The dollar value of cell KK is 12. The dollar value of cell LL is 13. The dollar value of cell MM is 14. The dollar value of cell NN is 15. The dollar value of cell OO is 16. The dollar value of cell PP is 17. The most influential parameter (P, AOR ...) on the project's NPW in the - 15% to +15% range is 18. The second (2nd) most influential parameter on the project's NPW in the --15% to +15% range is 19. If you plotted a spider diagram instead of completing a sensitivity Table for any project, the third most influential project parameter would have a) the curve with the third steepest positively or negatively sloped curve. b) the third steepest positively sloped curve. c) the third steepest negatively sloped curve. d) it is impossible to determine project sensitivity to its parameters from the spider diagram
