Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What is your opinion regarding the sensitivity of the PV metric to the changes in the projected long-term growth rate of the project below? what
What is your opinion regarding the sensitivity of the PV metric to the changes in the projected long-term growth rate of the project below? what would be your capital budgeting decision to proceed with the project or not?
Long-term growth rate | |||||||||
0.5% | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | 4.0% | ||
Discount rate | 9.0% | 293,992 | 335,668 | 382,902 | 436,882 | 499,168 | 571,835 | 657,713 | 760,768 |
9.5% | 247,722 | 284,096 | 325,016 | 371,393 | 424,395 | 485,550 | 556,899 | 641,220 | |
10.0% | 206,779 | 238,737 | 274,454 | 314,635 | 360,174 | 412,219 | 472,270 | 542,330 | |
10.5% | 170,355 | 198,599 | 229,982 | 265,057 | 304,516 | 349,236 | 400,345 | 459,317 | |
11.0% | 137,795 | 162,892 | 190,631 | 221,452 | 255,899 | 294,652 | 338,572 | 388,767 | |
11.5% | 108,565 | 130,974 | 155,624 | 182,869 | 213,141 | 246,974 | 285,037 | 328,174 | |
12.0% | 82,223 | 102,321 | 124,332 | 148,545 | 175,307 | 205,042 | 238,275 | 275,662 | |
12.5% | 58,402 | 76,499 | 96,242 | 117,865 | 141,650 | 167,939 | 197,149 | 229,795 | |
13.0% | 36,792 | 53,149 | 70,928 | 90,323 | 111,566 | 134,933 | 160,760 | 189,456 | |
13.5% | 17,132 | 31,966 | 48,037 | 65,505 | 84,561 | 105,432 | 128,390 | 153,764 | |
14.0% | - 799 | 12,697 | 27,272 | 43,063 | 60,226 | 78,950 | 99,457 | 122,015 | |
14.5% | - 17,194 | - 4,879 | 8,383 | 22,706 | 38,222 | 55,088 | 73,487 | 93,638 | |
15.0% | - 32,214 | - 20,947 | - 8,845 | 4,188 | 18,263 | 33,512 | 50,086 | 68,167 | |
15.5% | - 46,003 | - 35,668 | - 24,594 | - 12,701 | 108 | 13,941 | 28,927 | 45,216 | |
16.0% | - 58,684 | - 49,181 | - 39,023 | - 28,139 | - 16,449 | - 3,860 | 9,736 | 24,465 | |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started