Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The breakeven (NPW=$0) MARR of the project is between options: 12.0 and 12.5% 12.7 and 13.2% 13.4 and 13.9% 14.2 and 14.7% - You are

image text in transcribed

The breakeven (NPW=$0) MARR of the project is between

options:

12.0 and 12.5%

12.7 and 13.2%

13.4 and 13.9%

14.2 and 14.7%

-

You are asked to perform a scenario analysis instead of a sensitivity analysis. Assume that the values of the three scenarios (optimistic, most probable and pessimistic) are to be populated from the NPW dollar values of the sensitivity table which you completed above. The dollar value of the project's annual operating revenue (AOR) for the optimistic scenario would be

options:

0

600,000(1.15)

600,000

600,000(0.85)

-

You are asked to perform a scenario analysis instead of a sensitivity analysis. Assume that the values of the three scenarios (optimistic, most probable and pessimistic) are to be populated from the NPW dollar values of the sensitivity table which you completed above. The project's MARR for the optimistic scenario would be

options:

10%(0.85)

10%

10%(1.15)

105(0)

PLEASE GIVE ME THE ANSWER

1. Initial Cost (P) = $960,000 2. Salvage value (SV) = $12,133 3. Annual operating revenues (AOR) = $600,000 4. Annual operating costs (AOC) = $325,000 5. Economic life (N) = 5 years 6. MARR = 10% 7. Inflation Rate = 0%. One-way Sensitivity Table Net Present Worth (NPW) Parameters -15% -10% -5% +5% +10% +15% Reference Scenario BB P AA CC AOR DD EE AOC FF GG HH SV II JJ KK N LL MM MARR NN oo PP

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

Small Business Finance And Valuation

Authors: Rick Nason, Dan Nordqvist

1st Edition

1952538122, 9781952538124

More Books

Students also viewed these Finance questions

Question

Summarize the reactive strategy of your organization.

Answered: 1 week ago