Recreate spreadsheet templates 10.2 and 10.3.

Solve the following problem by using spreadsheet template 10.2. Some modifications of the original template may be necessary.

The managers of a company are considering an investment with the following estimate cash flows; however, they are nervous due to uncertainty. The investment is known to within +/-5% and annual expenses are known to within +/-10%. Annual revenue, market value and useful life estimates are known to within +/-20%.

MARR: 15%

Capital Investment: -$30,000

Annual Revenues: $20,000

Annual Expenses: $5,000

Salvage Values: $1,000

Life: 5 years

A) Graph the PW showing uncertainties (spider graph---10 legs, not 8)

B) Rank the variables needing more info---highest need to lowest need.

Include one spreadsheet w/ the following tabs:

Template 10.2

Template 10.3

Solve above problem using Template 10.2. Be sure to include the problem statement with answers and ranking of which variables need more information.

Template 10.2: Sensitivity Analysis, Varying Single A primary spreadsheet application is to answer "what-if" types of questions. This template examines the impact of changes in the interest rate (MARR), useful life, annual savings, and market value on the PW of an investment. Since more than one parameter may vary, sensitivity analysis is appropriate. Sensitvity Analysis IRE empla User in ominal Values Unique Unique Form SB$7,SB$8) ange MARR Market Value Life (N) Savings (A) 12 $30,943 $15,185($8,547)($15,658) Template 10.2: Sensitivity Analysis, Varying Single A primary spreadsheet application is to answer "what-if" types of questions. This template examines the impact of changes in the interest rate (MARR), useful life, annual savings, and market value on the PW of an investment. Since more than one parameter may vary, sensitivity analysis is appropriate. Sensitvity Analysis IRE empla User in ominal Values Unique Unique Form SB$7,SB$8) ange MARR Market Value Life (N) Savings (A) 12 $30,943 $15,185($8,547)($15,658)