Make a Sensitivity analysis graph. An example will be on imag

Example of sensitivitye$.$

Background:

Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line would be set up in unused space in the main plant. The machinery$$s invoice price would be approximately $$200,000,$ another $$10,000$ in shipping charges would be required, and it would cost an additional $$30,000$ to install the equipment. The machinery has an economic life of $4$ years, and Shrieves has obtained a special tax ruling that places the equipment in the MACRS $3-$year class. The machinery is expected to have a salvage value of $$25,000$ after $4$ years of use.

The new line would generate incremental sales of $1,000$ units per year for $4$ years at an incremental cost of $$100$ per unit in the first year, excluding depreciation. Each unit can be sold for $$200$ in the first year. The sales price and cost are both expected to increase by $3\%$ per year due to inflation. Further, to handle the new line, the firm$$s net working capital would have to increase by an amount equal to $12\%$ of sales revenues. The firm$$s tax rate is $25\%,$ and its overall weighted average cost of capital, which is the risk$-$adjusted cost of capital for an average project $($r$),$ is $10\%.$