Bloopers analysts have come up with the following revised estimates for its magnoosium mine:

	Range
	Pessimistic				Optimistic
Initial investment	+	50	%			25	%
Revenues		15	%		+	15	%
Variable costs	+	15	%			15	%
Fixed cost	+	40	%			50	%
Working capital	+	45	%			50	%

Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 and accompanying data as a starting point for the analysis. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in thousands rounded to the nearest whole dollar.)

	Project NPV
	Pessimistic	Expected	Optimistic
Initial investment
Revenues
Variable costs
Fixed costs
Working capital

A. Inputs

Initial investment ($ thousands)15,000

Salvage value ($ thousands)2,000

Initial revenues ($ thousands)15,000

Variable costs (% of revenues)40.0%

Initial fixed costs ($ thousands)4,000

Inflation rate (%)5.0%

Discount rate (%)12.0%

Receivables (% of sales) 16.7%

Inventory (% of next year's costs)15.0%

Tax rate (%)21.0%

Year:0123456

B. Fixed assets

Investments in fixed assets15,000

Sales of fixed assets1,580

Cash flow from fixed assets-15,0001,580

C. Operating cash flow

Revenues15,00015,75016,53817,36418,233

Variable expenses6,0006,3006,6156,9467,293

Fixed expenses4,0004,2004,4104,6314,862

Depreciation3,0003,0003,0003,0003,000

Pretax profit2,0002,2502,5132,7883,078

Tax420473528586646

Profit after tax1,5801,7781,9852,2032,431

Operating cash flow4,5804,7784,9855,2035,431

D. Working capital

Working capital1,5004,0754,2794,4934,7173,0390

Change in working capital1,5002,575204214225-1,679-3,039

Cash flow from investment in working capital-1,500-2,575-204-214-2251,6793,039

0.4080.4080.4080.4080.250

E. Project valuation

Total project cash flow-16,5002,0054,5744,7714,9787,1104,619

Discount factor1.0000.8930.7970.7120.6360.5670.507

PV of cash flow-16,5001,7903,6463,3963,1644,0342,340

Net present value1,870.1