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Finefodders analysts have come up with the following revised estimates for the Gravenstein store: Range Pessimistic Expected Optimistic Investment $ 5,400,000 $ 5,200,000 $ 5,000,000
Finefodders analysts have come up with the following revised estimates for the Gravenstein store: |
Range | ||||||||||||
Pessimistic | Expected | Optimistic | ||||||||||
Investment | $ | 5,400,000 | $ | 5,200,000 | $ | 5,000,000 | ||||||
Sales | 16,000,000 | 18,000,000 | 21,000,000 | |||||||||
Variable costs as % of sales | 81 | 80 | 79.5 | |||||||||
Fixed cost | $ | 3,000,000 | $ | 2,600,000 | $ | 2,300,000 | ||||||
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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