The following annual maintenance and operation (M&O) costs for a piece of equipment were collected over a
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Question:
The following annual maintenance and operation (M&O) costs for a piece of equipment were collected over a 5-year period.
YEAR
M&O Costs
2016
$12,300
2017
$8,900
2018
2019
$12,500
$12,100
2020
$12,200
a) What is sensitivity analysis?
b) Based on the 5 years' data above, in conducting a sensitivity analysis, what is the most reasonable range of the costs to use? Explain and show the calculation
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