The relevant CCA rate for capital expenditures is 15%. Assume assets are never sold. c. Management would the to exploce the sensitivity of their analysis to possible growh in revenues and operating expenses. Specificaly, they would like to assume that revenues, manufacturng expenses, and markosing expenses are as given in the table for Yoar 1 and gow by 4% starting in Yoar 2 . Management also plans to assunse that the initial captal expenditures (and therefore CCA), addtions to working capital, and continuation value remain as intally speoded in the table. What is the NPV of this project under these altemative assumptions? How does the NPV change i the revenves and operating expenses grow by 6% per year rather than by 4% ? d. To examine the sensitivity of this project to the discount rate, management would like to compute the NPV for difierent diacount rates. Create a graph, weh the discount fate on the x-axis and NPV on the y-axis, for discount rates ranging from 5% to 30%. For what ranges of discount rates does the project have a postwe NPV? c. What is the NPV A revenues, manufacturing expenses, and morketing expenses grow by 4% and inital captal expenditures, additions so working capital, and contenuaton value remain the same? NPV is $ million, (Round to mo decimal places.) What is the NPV if revenues, manufacturing expenses, and marketing expenses grow by 6% and intlai captal expenditures, additons to workong capital, and continuation value remain the same? NPViss milion. (Round to two decimal placos) d. To examine the sensitivity of this project to the discount rate, manogement would two to compute the NPV for diterent discount rates Creale a graph, with discount rate on the x-axis and NPV on the y-axis, for discount rates ranging from 5% to 30%. For what ranges of discount rates does the project have a positive NPV? Assurning zero percent growh of rovenues, manufacturing expenses, and marketing expenses, what is the NPV when the discount rate is 6%, 20%, and 30% ? The NPV when the discount rate is 5% is $ millon (Round to two decimal places.) The NPV when the discount rate is 20% is $ millon. (Round to two decimal places.) The NPV when the discount rate is 305 is $ million. (Round to two decimal places) d. Create a graph, with discount rate on the x-axis and NPV on the y axis, for discount rates 5%,20%, and 30% when the growh of reverues, nuanufacturing expenses, and marketing expenses is zeto. (Use the drawing tool for a 3 point curve and round NPV to the nearost ton) d. Create a graph, with discount rate on the x-axis and NPV on the y-axis, for discoupt rates 5%,20%, and 30% when the growth of revenues, manufacturing expenses, and marketing expenses is zero. (Use the drawing tool for a 3-point curve and round NPV to the nestest fen:)
