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 costdecreases by 5%, the NPW is $
   • If the Initial equipment costdecreases by 5%, the NPW is $
   • If the Annual benefitsdecrease by 5%, the NPW is $
   • If the Annual O&M costdecreases 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.
   

TABLE 12.2 Sensitivity Analysis for Five Key Input Variables (Example 12.1) A B C D E F G H 2 Percent () Deviation from the Base 3 Variables Base -20% -15% -10% -5% 0% 5% 10% 15% 20% 5 6 Unit price 40.00 42.50 45.00 47.50 50.00 52.50 55.00 57.50 60.00 7 INPW (57) 9.999 20.055 30,111 40,169 50,225 60,281 70.337 80.393 B Demand 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 10 NPW 12,010 19,049 26,088 33,130 40,169 47,208 54,247 61,286 68,325 11 12 Variable cost 12.00 12.75 13.50 14.25 15.00 15.75 16.50 17.25 18.00 13 NPW 52,236 49.219 46,202 43.185 40,169 37,152 34,135 31,118 28,101 14 15 Fixed cost 8,000 8,500 9,000 9,500 10,000 10,500 11,000 11,500 12,000 16 INPW 44,191 43,185 42,179 41,175 40,169 39,163 38,157 37,151 36,145 17 18 Salvage value 32,000 34,000 36,000 38,000 40,000 42,000 44,000 46,000 48,000 19 NPW 37,782 38,378 38,974 39,573 40,169 40,765 41,361 41,957 42,553 20