Part IV: Sensitivity Analysis

Use this information to answer questions 26 30.

BearKat Enterprises wants you to do a sensitivity analysis where you increase the mask price by 10% and decrease it by 10%. Also see what happens when you increase the variable costs by 10% and decrease them by 10%.

QUESTION 26

1. Use the information from part IV to answer this.

   What is the NPV of the project if the price of the masks is increased by 10%?

   	A.	$13,956.77
   	B.	$27,015.85
   	C.	$39,451.63
   	D.	$45,637.41

QUESTION 27

Use the information from part IV to answer this.

What is the NPV of the project if the price of the mask is decreased by 10%?

	A.	-$1,585.03
	B.	-$2,721.25
	C.	-$5,164.01
	D.	-$6,789.76

QUESTION 28

Use the information from part IV to answer this.

What is the NPV of the project if the variable cost to make the mask is decreased by 10%?

	A.	-$25,702.84
	B.	$52,123.44
	C.	$79,280.95
	D.	$102,710.95

QUESTION 29

Use the information from part IV to answer this.

What is the NPV of the project if the variable cost to make the mask is increased by 10%?

	A.	-$25,702.84
	B.	-$37,968.72
	C.	-$65,980.56
	D.	-$98,808.51

QUESTION 30

Changing the price by 10% has a bigger impact on the NPV then changing the variable costs of the mask by 10%.

True

False