Blooper's analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic 25 % - 25% 20 % Optimistic - 20 % 15 % - 25 % -45 % -45% Initial investment Revenues Variable costs Fixed cost 25% Working capital 25% Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 101 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 costs Fixed costs Working capital A. Inputs Initial investment ($ thousands) Salvage value ($ thousands) Initial revenues ($ thousands) 10,000 2,000 15,000 Variable costs (% of revenues) Initial fixed costs ($ thousands) Initial total expenses ($ thousands) Inflation rate (%) 40.0% 4,000 10,000 5.0% Discount rate (%) Receivables (% of sales) 12.0% 16.7% Inventory (% of next year's costs) 15.0% Tax rate (%) 35.0% Year: 0 1 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 7,293 6,615 6,946 Fixed expenses 4,410 4,862 4,000 4,200 4,631 2,000 2,000 2,000 2,000 Depreciation 2,000 Pretax profit 3,788 3,000 3,250 3,513 4,078 Tax 1,138 1,229 1,050 1,326 1,427 Profit after tax 2,283 1,950 2,113 2,462 2,650 Operating cash flow 3,950 4,113 4,283 4,462 4,650 D. Working capital Working capital 1,500 4,493 4,075 4,279 4,717 3,039 Change in working capital Cash flow from investment in working capital 1,500 2,575 204 214 225 -1,679 -3,039 1,679 -1,500 -2,575 -204 -214 -225 3,039 0.408 0.408 0.408 0.408 0.250 E. Project valuation Total project cash flow 4,238 -11,500 1,375 3,909 4,069 6,329 4,339 Blooper's analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic 25 % - 25% 20 % Optimistic - 20 % 15 % - 25 % -45 % -45% Initial investment Revenues Variable costs Fixed cost 25% Working capital 25% Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 101 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 costs Fixed costs Working capital A. Inputs Initial investment ($ thousands) Salvage value ($ thousands) Initial revenues ($ thousands) 10,000 2,000 15,000 Variable costs (% of revenues) Initial fixed costs ($ thousands) Initial total expenses ($ thousands) Inflation rate (%) 40.0% 4,000 10,000 5.0% Discount rate (%) Receivables (% of sales) 12.0% 16.7% Inventory (% of next year's costs) 15.0% Tax rate (%) 35.0% Year: 0 1 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 7,293 6,615 6,946 Fixed expenses 4,410 4,862 4,000 4,200 4,631 2,000 2,000 2,000 2,000 Depreciation 2,000 Pretax profit 3,788 3,000 3,250 3,513 4,078 Tax 1,138 1,229 1,050 1,326 1,427 Profit after tax 2,283 1,950 2,113 2,462 2,650 Operating cash flow 3,950 4,113 4,283 4,462 4,650 D. Working capital Working capital 1,500 4,493 4,075 4,279 4,717 3,039 Change in working capital Cash flow from investment in working capital 1,500 2,575 204 214 225 -1,679 -3,039 1,679 -1,500 -2,575 -204 -214 -225 3,039 0.408 0.408 0.408 0.408 0.250 E. Project valuation Total project cash flow 4,238 -11,500 1,375 3,909 4,069 6,329 4,339