Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show excel functions hopefully this helps 88 b. Now conduct a sensitivity analysis termine the sensitivity of NPV to changes in the sales price,

please show excel functions image text in transcribed
image text in transcribed
hopefully this helps image text in transcribed
88 b. Now conduct a sensitivity analysis termine the sensitivity of NPV to changes in the sales price, variable costs per 89 unit, and number of units sold. Set these variables' values at 10% and 20% above and below their base-case values. Include a 90 graph in your analysis. (15 points for S.A/5 points for graph) 91 92 % Deviation SALES PRICE 93 from Base NPV 94 Base Case $24.00 95 -20% 96 -10% 97 0% 38 10% 99 20% 00 01 02 03 % Deviation VARIABLE COST % Deviation 1st YEAR UNIT SALES 04 from Base NPV from Base NPV 05 Base Case $17.50 Base Case 1,000 06 -20% -20% 07 -10% -10% 08 0% 0% 19 10% 10% 10 20% 20% 11 12 14 Net Present Value (at 10%) IRR - MIRR Payback - $3,463.34 21.09% 16.99% 2.90 Net cash flow Cumulative CF of year required for payback -$12,400.00 -$12,400.00 (0.90) $4,028,00 -$8,372.00 $4,604.84 -$3,767.16 $4,192.59 $425.43 $7,680.54 $8,105.97 AL 88 b. Now conduct a sensitivity analysis termine the sensitivity of NPV to changes in the sales price, variable costs per 89 unit, and number of units sold. Set these variables' values at 10% and 20% above and below their base-case values. Include a 90 graph in your analysis. (15 points for S.A/5 points for graph) 91 92 % Deviation SALES PRICE 93 from Base NPV 94 Base Case $24.00 95 -20% 96 -10% 97 0% 38 10% 99 20% 00 01 02 03 % Deviation VARIABLE COST % Deviation 1st YEAR UNIT SALES 04 from Base NPV from Base NPV 05 Base Case $17.50 Base Case 1,000 06 -20% -20% 07 -10% -10% 08 0% 0% 19 10% 10% 10 20% 20% 11 12 14 Net Present Value (at 10%) IRR - MIRR Payback - $3,463.34 21.09% 16.99% 2.90 Net cash flow Cumulative CF of year required for payback -$12,400.00 -$12,400.00 (0.90) $4,028,00 -$8,372.00 $4,604.84 -$3,767.16 $4,192.59 $425.43 $7,680.54 $8,105.97 AL

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Business Of Finance

Authors: Withers Hartley 1867 1950

1st Edition

1313069299, 9781313069298

More Books

Students also viewed these Finance questions

Question

Analyse the process of new product of development.

Answered: 1 week ago

Question

Define Trade Mark.

Answered: 1 week ago