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Your company is considering investing in a new production machine. Three of the machine's parameters are considered uncertain: the initial investment, units produced and MARR.
Your company is considering investing in a new production machine. Three of the machine's parameters are considered uncertain: the initial investment, units produced and MARR. A sensitivity graph which plots the present worth of the machine vs. the percentage change from the base case is illustrated below. The values used for the base case are provided in the table. Cost category Base case Initial investment $25,000 Units produced 50,000 MARR 10% Units Produced 550.000 SHOO $20.000 PW $10.000 0 Initial Investment -$10,000 MARR $20,000 -20% *% -6% 4% 24 0 24 4 4 84 105 Percentage Change from Base Case (a) The profitability of this machine is most susceptible to which parameter? Select the correct parameter between Part (al options 1 to 4. (b) What is the break even MARR? Select the correct break even MARR between Part (b) options 1 to 4. (c) What is the break even cost for the initial investment? Select the correct break even cost between Part (c) options 1 to 4. Select 3 correct answert! Part (a) - Option 1: Initial investment Part (a) - Option 2: MARR Part (a) - Option 3: Present worth Part (a) - Option 4: Units produced Part (b) - Option 1: break even MARR = 6% | Part (b) - Option 2: break even MARR = 10% Part (b) - Option 3: break even MARR = 10.6% Part (b) - Option 4: break even MARR = 9.2% Part (c) - Option 1: break even cost for initial investment = $27,500 Part (c) - Option 2: break even cost for initial investment = $2.500 Part (c) - Option 3: break even cost for initial investment = $22,500 Part (c) - Option 4: break even cost for initial investment = $24,500
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