XYZ CO. is considering a project with following cash flows:

Initial investment	OMR 100,000
Variable costs per unit	OMR 10
Selling price per unit	OMR 13
Fixed costs per year	OMR 15,000
Number of unit produced and sold	25,000 units per year
Project life	2 years
Cost of capital	11%

1. What is the sensitivity of the project NPV to change in initial investment?
2. a) 3.78%
3. b) 7.38%
4. c) 2.78%
5. d) 4.78%

2. What is the sensitivity of the project NPV to the change in sales volume?

a) 2.16%

b) 3.16%

c) 2.61%

d) 4.61%

3. What is the sensitivity of the project NPV to the change in selling price?

a) 0.499%

b) 4.9%

c) 0.994%

d) 9.4%

4. What is the sensitivity of the project NPV to the change in variable costs?

a) 5.6%

b) 0.95%

c) 0.65%

d) 6.5%

5. To which variable the project NPV appears to be most sensitive?

a) Variable costs

b) Selling price

c) Sales volume

d) Initial investment