Silly Ventures Unlimited.Your company makes rockets to send satellites, cars and people up in space.An old rocket of yours cost you $2$M $(2$ million euro$)$ to make but is totally spent and useless to you at this time.An entrepreneur wants to buy it off you for $120\mathrm{.}000,$ to turn it into an eye$-$catching restaurant.Removing remaining fuel, body parts and chemicals will cost you $50\mathrm{.}000$ as you don't have those facilities yourself.Some missing parts need to be found to complete the old rocket. $2$ windows are available: they do not get used anymore in current or future rockets and cost $7\mathrm{.}500$ each when purchased. One nose cone was taken off the shelf of current production rockets, with replacement cost of $6\mathrm{.}000.$Transport is very difficult and will set you back an estimated $25\mathrm{.}000,$ not including the $1000$ insurance fee. A cleanup effort will take about $10$ man$-$days, paid at $300/$d.

 Please perform a sensitivity analysis on the above deal. Your company's profit is sensitive to

a$)$ The price for the removal of body $(?)\%$price hike

b$)$the price for the replacement windows, up to $(?)\%$ price hike.

c$)$the price for the fancy nose cones, up to $(?)\%$ price hike.

d$)$the price for the transport, insurance and cleanup combined, up to$(?)\%$ price hike

 

Answer rating: 100% (QA)

To perform a sensitivity analysis we need to assess how changes in various parameters affect the profitability of the deal Well analyze the impact of ... View the full answer