Q$3.$ B: Sensitivity Analysis Calculations:

For the financial model of EcoVase project, the Net Present Value is BD $50,000.$ Now you are required to perform "sensitivity analysis" by calculating the new NPV if:

a$)$ The sales volume decreases by $12\%.$

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b$)$ The variable cost per vase increases by $7\%.$

Which variable has the greater impact on NPV$?$ Other variables being constant $($LO$5$ S$-$N$)$

Solution: