Test your understanding 1 Sensitivity analysis An investment of $40,000 today is expected to give rise to annualcontribution of $25,000. This is based on selling one product, with asales volume of 10,000 units, selling price of $12.50 and variable costsper unit of $10. Annual fixed cost of $10,000 will be incurred for thenext four years; the discount rate is 10% Required: (a) Calculate the NPV of this investment. (b) Calculate the sensitivity of your calculation to the following: (i) initial investment (ii) selling price per unit (iii) sales volume (iv) fixed costs (v) discount rate