17 18 19 20 21 22 23 24 25 h. Perform a sensitivity analysis on the unit sales, salvage value, and cost of capital for the project. Assume that each of these variables can vary from its base case, or expected, value by plus and minus 10%, 20%, and 30%. Include a sensitivity diagram, and discuss the results. Here we use an Excel "Data Table" to find the NPVs for changes in unit sales, salvage value, and WACC holding other things constant-changing one variable at a time. This produces the sensitivity analys as shown below. We summarize the data tables and show the sensitivity analysis graph below: 96 Deviation % Deviation 1st YEAR UNIT SALES % Deviation SALVAGE from Baser NPV from Base units from Base Salv. NPV Base Case 10.096 Base Case 1.250 Base Case $25,000 -3096 7.096 -3096 875 3096 $17.500 -15% 3.59 -15% 1.063 1596 $21.250 09 10.09 096 1.250 0% $25,000 159 11.596 1596 1,438 1596 $28,750 30% 13.0% 3096 1.625 309 $32,500 r 26 NPV 27 28 29 30 131 132 133 134 135 136 137 138 NPV Deviation from Base Case NPV ($) Sensitivity Analysis Deviation from Base Case -30% 1596 096 15% 30% $0 0 0 0 0 139 Units Sold $0 0 0 0 0 Salvage $0 0 0 0 1 0 0 Range $0 $0 50 0 Salvage 140 141 142 143 144 145 146 147 148 149 150 0 -40% -20% Units Sold 0% 20% 40% Deviation from Base Case Value 1. Assume that Sidney Johnson is confident of her estimates of all the variables that affect the union 17 18 19 20 21 22 23 24 25 h. Perform a sensitivity analysis on the unit sales, salvage value, and cost of capital for the project. Assume that each of these variables can vary from its base case, or expected, value by plus and minus 10%, 20%, and 30%. Include a sensitivity diagram, and discuss the results. Here we use an Excel "Data Table" to find the NPVs for changes in unit sales, salvage value, and WACC holding other things constant-changing one variable at a time. This produces the sensitivity analys as shown below. We summarize the data tables and show the sensitivity analysis graph below: 96 Deviation % Deviation 1st YEAR UNIT SALES % Deviation SALVAGE from Baser NPV from Base units from Base Salv. NPV Base Case 10.096 Base Case 1.250 Base Case $25,000 -3096 7.096 -3096 875 3096 $17.500 -15% 3.59 -15% 1.063 1596 $21.250 09 10.09 096 1.250 0% $25,000 159 11.596 1596 1,438 1596 $28,750 30% 13.0% 3096 1.625 309 $32,500 r 26 NPV 27 28 29 30 131 132 133 134 135 136 137 138 NPV Deviation from Base Case NPV ($) Sensitivity Analysis Deviation from Base Case -30% 1596 096 15% 30% $0 0 0 0 0 139 Units Sold $0 0 0 0 0 Salvage $0 0 0 0 1 0 0 Range $0 $0 50 0 Salvage 140 141 142 143 144 145 146 147 148 149 150 0 -40% -20% Units Sold 0% 20% 40% Deviation from Base Case Value 1. Assume that Sidney Johnson is confident of her estimates of all the variables that affect the union
