Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Make Tornado diagram from the sensitivity analysis and explain the diagram Pessimistic Optimistic(10% positive) Revenue 2539026.00 =2539026*(1+10%) =2792928.60 Variable cost =2539026*40% =1015610.40 =1015610.4*(1-10%) =914049.36
Make Tornado diagram from the sensitivity analysis and explain the diagram
| Pessimistic | Optimistic(10% positive) | |
| Revenue | 2539026.00 | =2539026*(1+10%) =2792928.60 |
| Variable cost | =2539026*40% =1015610.40 | =1015610.4*(1-10%) =914049.36 |
| Fixed cost | 224936 | =224936*(1-10%) =202442.40 |
| Earning (A) | 1298479.6 | 1676436.84 |
| Initial investment (B) | 368912 | 368912 |
| Working capital(C) | -336.44 | -336.44 |
| NPV=A-B-C | $929904.04 | $1307861.28 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To create a tornado diagram from the sensitivity analysis we can focus on the variables that have th...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Managerial Accounting An Integrative Approach
Authors: C J Mcnair Connoly, Kenneth Merchant
2nd Edition
099950049X, 978-0999500491
