Big City Carl, a local politician, is pushing a new dock and pier system at the river to attract new commerce to the city. A committee appointed by the mayor (an opponent of Carl) has developed the following estimates.

Input Variable	Base Case
Initial building cost	$6,000,000
Initial equipment cost	$1,500,000
Annual benefits	$3,000,000
Annual O&M cost	$1,500,000

With a MARR of 6% and a project life of 10 years, perform a sensitivity analysis on the data using PW as the assessment metric. For each input, consider deviation of -10%, -5%, 0%, 5%, 10% from the base case.

1. For each deviation of each input, calculate PW and show the result as a table similar to Table 12.2 in the lecture (see below). Then answer the following questions. Round to the nearest integer.
   • The NPW of the base case is $
   • If the Initial building cost decreases by 5%, the NPW is $
   • If the Initial equipment cost decreases by 5%, the NPW is $
   • If the Annual benefits decrease by 5%, the NPW is $
   • If the Annual O&M cost decreases by 5%, the NPW is $
2. Plot the sensitivity graph in your Excel spreadsheet. You will need to upload the spreadsheet in the next question.
3. Which input has the biggest impact on the PW? Fill in Building, Equipment, Benefits, or O&M.

H 10% 15% 20% 55.00 60,281 57.50 70,337 60.00 80,393 TABLE 12.2 Sensitivity Analysis for Five Key Input Variables (Example 12.1) A B C D E F G 1 2 Percent (%) Deviation from the Base 3 Variables Base 4 -20% -15% -10% -5% 0% 5% 5 6 Unit price 40.00 42.50 45.00 47.50 50.00 52.50 7 NPW (57) 9,999 20,055 30,111 40,169 50,225 8 9 Demand 1,600 1,700 1,800 1,900 2,000 2,100 10 NPW 12,010 19,049 26,088 33,130 40,169 47,208 11 12 Variable cost 12.00 12.75 13.50 14.25 15.00 15.75 13 NPW 52,236 49,219 46,202 43,185 40,169 37,152 14 15 Fixed cost 8,000 8,500 9,000 9,500 10,000 10,500 16 NPW 44,191 43,185 42,179 41,175 40,169 39,163 17 18 Salvage value 32,000 34,000 36,000 38,000 40,000 42,000 19 NPW 37,782 38,378 38,974 39,573 40,169 40,765 20 2,200 54,247 2,300 61,286 2,400 68,325 16.50 34,135 17.25 31,118 18.00 28,101 11,000 38,157 11,500 37,151 12,000 36,145 44,000 41,361 46,000 41,957 48,000 42,553