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Given the information below, calculate the NPV's for the following scenarios: 1 Unit price goes up by 10% 2 Variable price goes up by 10%
Given the information below, calculate the NPV's for the following scenarios: | ||||
1 | Unit price goes up by 10% | |||
2 | Variable price goes up by 10% | |||
3 | Unit sales goes down by 10% | |||
4 | Fixed price goes up by 10% | |||
Base information remains the same between scenarios except for the variables 1-4. | ||||
Compute the NPV's for each scenerio and tell me which one is the most sensitve and why? | ||||
Base Info | ||||
Unit price | $ 110 | |||
Variable cost per unit | $ 60 | |||
Fixed Costs | $ 230,000 | |||
Expected Sales (units) | 10,000 | units | ||
Required rate of return | 10% | |||
Tax Rate | 21% | |||
Cost of machine | $ 1,000,000 | |||
Salvage Value | $ - | |||
Life | 10 | Years | ||
Working Capital Increase | $ - | |||
Please show the Excel Formulas as well. This is all the information and detail that I have. The question is in bold
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