Question: 1. Perform sensitivity analysis on the following project by first finding the NPV for the base case, then for a 10% decline in quantity sold

1. Perform sensitivity analysis on the following project by first finding the NPV for the base case, then for a 10% decline in quantity sold and a 10% increase in quantity sold.

Investment = $270,000 Straight line depreciation

over 3 years

quantity sold per year = 20,000

Price per unit = $20

Operating Cost = $10 per unit (all variable)

Tax rate 25% cost of capital 10%

Project will have a 3-year life

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