Question: Sensitivity Analysis Given the following sensitivity analysis for a new project, answer the questions below: CHANGE FROM _________________ NPV (IN $000,000S)________________ BASE LEVEL (%) UNITS
Sensitivity Analysis
Given the following sensitivity analysis for a new project, answer the questions below:
CHANGE FROM _________________NPV (IN $000,000S)________________
BASE LEVEL (%) UNITS SOLD VARIABLE COST/UNIT PRICE/UNIT
-40% -2 100 -160
-20% 11 80 -145
-10% 18 68 -92
0% 49 49 49
+10% 77 -20 89
+20% 88 -38 153
+40% 102 -88 172
16. What is the expected NPV in $000,000s?
a. 49 b. 18 c. -2 d. Can Not Be Determined
17. What is the expected NPV if the Projects Variable Cost were 20% higher than Base (expected)?
-20 b. -38 c. -92 d. None
18. Which input variable would cause you the most concern?
Units Sold b. Cost of Capital c. Variable cost d. Price per Unit
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
Study Help