Use a Sensitivity Analysis $to$ Adjust Cash Flows $inNPV$

Refer $to$ the data provided below for Proposal A and also provided $inan$ Excel file $in$ this link $to$ answer the following questions.

Proposal $A$

Initial investment $$100,000$

Cash flow from operations

Year $160,000$

Year $240,000$

Year $335,000$

Disinvestment $-$

Life $(years)3$

Discount rate $(for$ all proposals$)12\%$

$a.$ Prepare a table $in$ Excel $to$ compute the net present value for Proposal A and consider this the likely scenario. Next, prepare $an$ optimistic and pessimistic scenario. For the optimistic scenario, increase each cash inflow $by10\%$ and for the pessimistic scenario, decrease each net cash inflow $by10\%.$

Note: Round your answers $to$ the nearest whole dollar. Use a negative sign $to$ indicate a cash outflow.

Proposal A Proposal A Proposal $A$

Likely Optimistic Pessimistic

Initial investment Answer $1$

$(100,000)$

Answer $2$

$(100,000)$

Answer $3$

$(100,000)$

Year $1$ Answer $4$

$53,571$

Answer $5$

$58,929$

Answer $6$

$48,214$

Year $2$ Answer $7$

$31,888$

Answer $8$

$0$

Answer $9$

$0$

Year $3$ Answer $10$

Answer $11$

$0$

Answer $12$

$0$

Net present value

$-14541$

$(41,071)$

$(51,786)$