Blooper’s analysts have come up with the following revised estimates for its magnoosium mine:

	Range
	Pessimistic				Optimistic
Initial investment	+	30	%		–	25	%
Revenues	–	25	%		+	20	%
Variable costs	+	25	%		–	15	%
Fixed cost	+	50	%		–	50	%
Working capital	+	30	%		–	4535	%

Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 and accompanying data as a starting point for the analysis. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in thousands rounded to the nearest whole dollar.)

Project NPV

	Pessimistic	Expected	Optimistic
Initial Investment
Revenues
Variable Cost
Fixed Cost
Working Capital

	A. Inputs
	Initial investment ($ thousands)	10,000
	Salvage value ($ thousands)	2,000
	Initial revenues ($ thousands)	15,000
	Variable costs (% of revenues)	40.0%
	Initial fixed costs ($ thousands)	4,000
	Initial total expenses ($ thousands)	10,000
	Inflation rate (%)	5.0%
	Discount rate (%)	12.0%
	Receivables (% of sales)	16.7%
	Inventory (% of next year's costs)	15.0%
	Tax rate (%)	35.0%
	Year:	0	1	2	3	4	5	6
	B. Fixed assets
	Investments in fixed assets	10,000
	Sales of fixed assets							1,300
	Cash flow from fixed assets	-10,000						1,300
	C. Operating cash flow
	Revenues		15,000	15,750	16,538	17,364	18,233
	Variable expenses		6,000	6,300	6,615	6,946	7,293
	Fixed expenses		4,000	4,200	4,410	4,631	4,862
	Depreciation		2,000	2,000	2,000	2,000	2,000
	Pretax profit		3,000	3,250	3,513	3,788	4,078
	Tax		1,050	1,138	1,229	1,326	1,427
	Profit after tax		1,950	2,113	2,283	2,462	2,650
	Operating cash flow		3,950	4,113	4,283	4,462	4,650
	D. Working capital
	Working capital	1,500	4,075	4,279	4,493	4,717	3,039	0
	Change in working capital	1,500	2,575	204	214	225	-1,679	-3,039
	Cash flow from investment in working capital	-1,500	-2,575	-204	-214	-225	1,679	3,039
			0.408	0.408	0.408	0.408	0.250
	E. Project valuation
	Total project cash flow	-11,500	1,375	3,909	4,069	4,238	6,329	4,339