If the sensitivity Table for this assignment had been based on the Internal Rate of Return (IRR) decision criterion i stead of the Net Present Worth (NPW) criterion, would you necessarily obtain different answers as the most or least influentioal project parameters?
23. If the sensitivity Table for this assignment had been based on the Internal Rate of Return (IRR) decision criterion instead of the Net Present Worth (NPW) criterion, would you necessarily obtain different answers as the most or least influential project parameters? B. Problem Statement You are the planning the purchase of landscaping equipment While you have done the necessary due diligence, you are doubtful that your investment will perform according to the equipment salesperson. Due to lingering uncertainty, you've mandated a classmate to perform a one-way sensitivity analysis of your potential purchase. The current "best" guesses for the project parameters are: 1. Initial Cost (P) = $600,000 2. Salvage value (SV) = $200,000 at EOY5 3. Annual operating revenues (AOR) = $850,000 4. Annual operating costs (AOC) = $723,265 5. Economic life (N) = 5 years 6. MARR = 10% 7. Inflation Rate = 0%. One-way Sensitivity Table Net Present Worth (NPW) Parameters -15% -10% -5% +5% +10% +15% Reference Scenario P AA GG HH BB AOR II CC AOC DD SV EE JJ N FF KK MARR 23. If the sensitivity Table for this assignment had been based on the Internal Rate of Return (IRR) decision criterion instead of the Net Present Worth (NPW) criterion, would you necessarily obtain different answers as the most or least influential project parameters? B. Problem Statement You are the planning the purchase of landscaping equipment While you have done the necessary due diligence, you are doubtful that your investment will perform according to the equipment salesperson. Due to lingering uncertainty, you've mandated a classmate to perform a one-way sensitivity analysis of your potential purchase. The current "best" guesses for the project parameters are: 1. Initial Cost (P) = $600,000 2. Salvage value (SV) = $200,000 at EOY5 3. Annual operating revenues (AOR) = $850,000 4. Annual operating costs (AOC) = $723,265 5. Economic life (N) = 5 years 6. MARR = 10% 7. Inflation Rate = 0%. One-way Sensitivity Table Net Present Worth (NPW) Parameters -15% -10% -5% +5% +10% +15% Reference Scenario P AA GG HH BB AOR II CC AOC DD SV EE JJ N FF KK MARR