Question: 1. A project is to require $340 , 000 in capital investment. It will save the company $150 , 000 annually (income) and have an
1. A project is to require $340 , 000 in capital investment. It will save the company $150 , 000 annually (income) and have an annual expense (operating cost)of $55 , 000 . The salvage value will be $75 , 000 The project will last 4 years and the discount rate will be 10% . A) Calculate the total expected net annual cash flows B) Calculate the NPV at 10% for project and all project variables C) Calculate the sensitivity values for the each variable at 75% or .75 sensitivity factor D) Calculate the sensitivity values for the each variable at a sensitivity factor 1.25 or 125% E) Plot a spider chart for the NPV sensitivity analysis F) The project is most sensitive to which variable? G) The least sensitive input is
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