SENSITIVITY ANALYSIS UNIT SALES SUMMARY % Deviation Number from base of unit NPV IRR case sales %
Question:
SENSITIVITY ANALYSIS UNIT SALES SUMMARY % Deviation Number from base of unit NPV IRR case sales % Deviation NPV IRR from base case 20% 1.500 $
SENSITIVITY ANALYSIS
UNIT SALES
SUMMARY
% Deviation Number
from base
of unit
NPV
IRR
case
sales
% Deviation
NPV
IRR
from base case
20%
1,500 $119,420.02
16.84%
Units
Variable
WACC
Units
Variable
WACC
0%
1,250 $ 13,012.29
7.27%
sales
Costs
sold
Costs
-20%
1.000 $ (93.395.44)
-4.04%
20% $ 119,420.02 $ (52,278.80) S
198.98
16.84%
0.73%%
7.22%
0% $ 13,012.29 $
13,012.29 $13.012.29
7.27%
7.27%
7.27%
-20% $ (93,395.44) $ 78,303.37 $26,709.18
4.04%
13.48%
7.33%
VARIABLE COSTS
% Deviation
We will see from the Summary table that the change in NPV and IRR are most sensitive
from base
Variable
with the change in Units sales and then the Variable costs while the change in WACC (Cost
cost
case
NPV
IRR
of capital) does not incur significant changes in NPV and IRR.
20% $ 90.00 $ (52,278.80)
0.73%
0% $ 75.00 $ 13,012.29
7.27%
-20% $ 60.00 $ 78,303.37
13.48%
COST OF CAPITAL
% Deviation
from base
WACC
case
NPV
IRR
20%
7.2% S
198.98
7.22%
0%
6% $ 13,012.29
7.27%
-20% 4.8% $ 26,709.18
7.33%
Additional comments: Formula for these?
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston