The expected Cash Flow forecast for the next 12 years is provided (see below). The cost of capital is 8% , assuming the variables remain constant, determine the Net Present Value (NPV) of the project.

	0th Year- During the 1st year of Investment	Years 1st - 12th
Investment	($5,400.00)
Sales		$16,000.00
Variable Costs		$13,000.00
Fixed Costs		$2,000.00
Depreciation		$450.00
Pretax P..s@40%		$220.00
Profit After Tax		$330.00
Operating Cash flow		$780.00
Net Cash Flow	($5,400.00)	$780.00
	NPV	$470.25

Variable	Pessimistic	Expected	Optimistic
Investment	-5508	-5400	-5292
Sales	15680	16000	16320
Variable Costs	13260	13000	12740
Fixed Costs	2040	2000	1960
Depreciation	459	450	441
NPV	-2406.15	478.14	3362.43

 

Build a Tornado diagram from the sensitivity analysis.