You are the proposal manager for an opportunity to design and build a new assembly line for the production of artificial heart valves. A required equipment item is a 3-D X-ray inspection system.

You have discussed purchase of the equipment with management, and their preference is to purchase the item as the assembly line is nearing completion (potentially up to 6 months away). You can use a rough estimate for the bid but would like to know the cost range you could anticipate in order to quantify project risk. The current price of the system is $75,500.00, and the current cost for installation is 15% of the purchase price. Price could vary by as much as +/- 10%, and installation may vary by +/- 5%, although the prices have not varied by that much in the past 6 months.

Use a sensitivity Analysis - Data table to Answer the following:

Use a data table to determine the range of costs you might encounter when it is time to purchase the item and install it.

SENSITIVITY ANALYSIS Assumptions Chairs Sold Price / Chair Cost/Chair Store Rent Payroll 1,000 $150 $50 $10,000 $50,000 Profit 2 Loss Statement \begin{tabular}{lrr} Revenue & 5 & 150,000 \\ Cost of Sales & & 50,000 \\ \cline { 2 - 3 } Gros Profit & 100,000 \\ SG8A & 60,000 \\ Operating Profit & $ & 40,000 \end{tabular}