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Sensitivity Analysis. Emperor's Clothes Fashions can invest $ 5 million in a sew plant for producing insisible makeup. The plant has an expected life of
Sensitivity Analysis. Emperor's Clothes Fashions can invest $ million in a sew plant for producing insisible makeup. The plant has an expected life of years, and expected sales are million jars of makeup a year. Fixed costs are $ million a year, and variable costs are $ per jar. The product will be priced at $ per jar. The plant will be depreciated straightline over years to as satvage valuc of zero. The opportunity cost of capital is and the tax rate is
a What is projest NPV under these hasecast ascumptuons?
b What is NPV if variable costs turn out to be $ per jar?
c What is NPV if fixed costs turn out to be mittion per year?
d At what price per jar woukd project NPV is zero?
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