Help, please!

I know how to calculate discount rate and variable production cost, but I am unsure how to do sales. What do I need to change for sales?

If you want, go ahead and calculate all parameters.

Thank you.

New Heritage Doll Company: Capital Budgeting Exhibit 1 Selected Operating Projections for Match My Doll Clothing Line Expansion 2010 2011 2012 2017 4,500 6,860 52.4% 2013 8,409 22.6% 2014 9,082 8.0% 2015 9,808 8.0% 2016 10,593 8.0% 11,440 8.0% 2018 12,355 8.0% 2019 13,344 8.0% 2020 14,411 8.0% 575 587 610 635 648 Revenue Revenue Growth Production Costs Fixed Production Expense (excl depreciation) Variable Production Costs Depreciation Total Production Costs Selling, General & Administrative Total Operating Expenses 622 5,521 178 660 7,079 6,000 224 575 2,035 152 2,762 1,155 3.917 3,404 152 4,131 1,735 5,866 598 4,669 152 5,419 2,270 7,690 4,291 152 5,029 2,102 7,132 0 5,078 164 5,853 2,452 8,305 192 6,827 2.860 9,687 674 7,685 242 8,600 3,603 12,203 6,519 207 7,373 3,089 10,462 6,321 2,648 8.969 1,250 1.250 7,963 3,336 11.299 Operating Profit (1.250) 583 994 1.277 1.392 1,503 1,623 1,753 1,893 2.045 2.209 3.0% 3.0% 3.0% 3.0% Working Capital Assumptions: Minimum Cash Balance as % of Sales Days Sales Outstanding Inventory Turnover (prod. cost/ending inv.) Days Payable Outstanding (based on tot. op. exp.) 3.0% 59.2x 3.0% 59.2x 3.0% 59.2x 3.0% 59.2x 59.2x 59.2x 59.2x 59.2x 3.0% 59.2x 12.7x 3.0% 59.2x 12.7x 7.7x 8.3x 12.7x 12.7x 12.7x 12.7x 12.7x 12.7x 31.0x 30.8x 30.9x 31.0x 31.0x 31.0x 31.0x 31.0x 31.0x 31.0x Capital Expenditures 1,470 952 152 152 334 361 389 421 454 491 530 135 252 272 294 318 432 206 1.112 343 1,855 371 2,003 400 2,163 1,472 Net Working Capital (NWC) Cash Account Receivable Inventory Account Payable Net Working Capital Change in NWC 729 360 1,590 461 1,717 498 500 427 538 581 627 317 1,363 396 593 1,418 84 640 692 484 1.334 747 941 2.250 800 2,336 677 1016 2,429 180 907 1,653 807 1,929 143 1,531 113 871 2.083 154 1,786 132 800 107 427 122 167 (2,429) Scenario III: Assuming the project will last fore ever and NWC will stay at 2,429 after 2020. The continuation value is calculated using EV/EBITDA Free Cash Flows Operating Cash Flows: EBIT(1-1) + Depreciation -750 502 749 919 987 1066 1152 1244 1343 1451 1567 Cash Flow from NWC:-change in NWC (800) (107) (427) (84) (113) (122) (132) (143) (154) (167) (180) Cash Flow from CapExp: - CapEx (1,470) (952) (152) (152) (334) (361) (389) (421) (454) (491) (530) Total Cash Flow (3020) (557) 169 682 541 583 630 680 735 793 857 Continuation value 32609.5 Total cash flow plus continuation value (3020) (557) 169 682 541 583 630 680 735 793 33466 Discount Rate 8.40% 13.31 Industrial EV/EBITDA average Under Recreation: EV/EBITDA NPV $14,410 IRR 31% Payback 7.4 Base Sensitivity Analysis Based on Scenario 3 as The Base Case Worst Best Parameter Sales 20% lower 8.40% 20% higher Discount Rate 9.00% 8.40% 7.70% Variable Production Cos 20% higher 8.40% 20% lower NPV Worst Base Best Parameter Sales Discount rate Variable Production cost 14,410 14,410 14,410 New Heritage Doll Company: Capital Budgeting Exhibit 1 Selected Operating Projections for Match My Doll Clothing Line Expansion 2010 2011 2012 2017 4,500 6,860 52.4% 2013 8,409 22.6% 2014 9,082 8.0% 2015 9,808 8.0% 2016 10,593 8.0% 11,440 8.0% 2018 12,355 8.0% 2019 13,344 8.0% 2020 14,411 8.0% 575 587 610 635 648 Revenue Revenue Growth Production Costs Fixed Production Expense (excl depreciation) Variable Production Costs Depreciation Total Production Costs Selling, General & Administrative Total Operating Expenses 622 5,521 178 660 7,079 6,000 224 575 2,035 152 2,762 1,155 3.917 3,404 152 4,131 1,735 5,866 598 4,669 152 5,419 2,270 7,690 4,291 152 5,029 2,102 7,132 0 5,078 164 5,853 2,452 8,305 192 6,827 2.860 9,687 674 7,685 242 8,600 3,603 12,203 6,519 207 7,373 3,089 10,462 6,321 2,648 8.969 1,250 1.250 7,963 3,336 11.299 Operating Profit (1.250) 583 994 1.277 1.392 1,503 1,623 1,753 1,893 2.045 2.209 3.0% 3.0% 3.0% 3.0% Working Capital Assumptions: Minimum Cash Balance as % of Sales Days Sales Outstanding Inventory Turnover (prod. cost/ending inv.) Days Payable Outstanding (based on tot. op. exp.) 3.0% 59.2x 3.0% 59.2x 3.0% 59.2x 3.0% 59.2x 59.2x 59.2x 59.2x 59.2x 3.0% 59.2x 12.7x 3.0% 59.2x 12.7x 7.7x 8.3x 12.7x 12.7x 12.7x 12.7x 12.7x 12.7x 31.0x 30.8x 30.9x 31.0x 31.0x 31.0x 31.0x 31.0x 31.0x 31.0x Capital Expenditures 1,470 952 152 152 334 361 389 421 454 491 530 135 252 272 294 318 432 206 1.112 343 1,855 371 2,003 400 2,163 1,472 Net Working Capital (NWC) Cash Account Receivable Inventory Account Payable Net Working Capital Change in NWC 729 360 1,590 461 1,717 498 500 427 538 581 627 317 1,363 396 593 1,418 84 640 692 484 1.334 747 941 2.250 800 2,336 677 1016 2,429 180 907 1,653 807 1,929 143 1,531 113 871 2.083 154 1,786 132 800 107 427 122 167 (2,429) Scenario III: Assuming the project will last fore ever and NWC will stay at 2,429 after 2020. The continuation value is calculated using EV/EBITDA Free Cash Flows Operating Cash Flows: EBIT(1-1) + Depreciation -750 502 749 919 987 1066 1152 1244 1343 1451 1567 Cash Flow from NWC:-change in NWC (800) (107) (427) (84) (113) (122) (132) (143) (154) (167) (180) Cash Flow from CapExp: - CapEx (1,470) (952) (152) (152) (334) (361) (389) (421) (454) (491) (530) Total Cash Flow (3020) (557) 169 682 541 583 630 680 735 793 857 Continuation value 32609.5 Total cash flow plus continuation value (3020) (557) 169 682 541 583 630 680 735 793 33466 Discount Rate 8.40% 13.31 Industrial EV/EBITDA average Under Recreation: EV/EBITDA NPV $14,410 IRR 31% Payback 7.4 Base Sensitivity Analysis Based on Scenario 3 as The Base Case Worst Best Parameter Sales 20% lower 8.40% 20% higher Discount Rate 9.00% 8.40% 7.70% Variable Production Cos 20% higher 8.40% 20% lower NPV Worst Base Best Parameter Sales Discount rate Variable Production cost 14,410 14,410 14,410