Question
Finefodder?s analysts have come up with the following revised estimates for the Gravenstein store: Range Pessimistic Expected Optimistic Investment $ 4,920,000 $ 4,800,000 $ 4,000,000
Finefodder?s analysts have come up with the following revised estimates for the Gravenstein store:
Range
Pessimistic
Expected
Optimistic
Investment
$
4,920,000
$
4,800,000
$
4,000,000
Sales
13,000,000
19,000,000
27,000,000
Variable costs as % of sales
74
72
71
Fixed cost
$
3,100,000
$
2,900,000
$
2,700,000
Assume the project life is 12 years, the tax rate is 40%, the discount rate is 8%, and the depreciation method is straight-line over the project's life. Conduct a sensitivity analysis for each variable and range and compute the NPV for each. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign. Enter your answers in dollars, not in millions.)
NPV of Gravenstein Store
Pessimistic
Expected
Optimistic
Investment
$
$
$
Sales
$
$
$
Variable costs as % of sales
$
$
$
Fixed cost
$
$
$
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