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Everyone was impacted by the economic impacts of COVID-19 to include nonprofits. Donations plummeted and volunteers dried up but the community's need for help only
Everyone was impacted by the economic impacts of COVID-19 to include nonprofits. Donations plummeted and volunteers dried up but the community's need for help only grew. The table below provides information for the Transformation Station, a nonprofit that focuses on people experiencing homelessness for the first time. Transformation Station has determined they need a bigger storage facility. They first need to perform an analysis to determine whether to build a larger storage facility. There is a lot of uncertainty with COVID-19 so include sensitivity analysis in your calculations. Conservative Estimate Most Likely Optimistic Estimate Estimate Construction cost of warehouse $25,000,000 $23,000,000 $20,000,000 Residual $ 0.00 $2,000,000.00 $3,000,000 value Useful life 25 years 25 years 25 years Estimated annual net $1,000,000 $3,000,000.00 $4,000,000.00 cost savings Rate of 10% 12% 14% return Part 1: Perform a sensitivity analysis for the three options above. Show your work to receive full points. Part 2: If you were the director of the Transformation Station, would you build the warehouse? Why? Discussion Response Due by Saturday: Review another student's construction decision. Do you agree with the decision and why
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