Question: please solve it manually Q1. Suppose the project with the following details was presented to you, and the company is concerned specifically about the sensitivity
Q1. Suppose the project with the following details was presented to you, and the company is concerned specifically about the sensitivity of the NPW to the unit price estimate. Project life = 5 years Required investment = $500,000 Salvage value = $50,000 Depreciation method = straight-line depreciation Price per unit = $40 Unit variable cost = $18 Annual demand = 100,000 units . Fixed annual cost = $230,000 Tax rate = 35% MARR = 15% (a) Develop the cash flow statement for this project, i.e., find the net cash flow for each of the five years of the project, and compute the NPW for the resulting cash flow. (b) Compute the NPW value for the following percent deviations from the most likely estimate of the unit price: +5% and +10% (you can draw a sensitivity graph instead if you'd like). (c) Determine the break-even price for this project (using Goal Seek)
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