Using the following data

Perform sensitivity analysis on the following project by first finding the NPV for the base case, then for a 10% decline in quantity sold and a 10% increase in quantity sold.

Investment = $200,000 Straight line depreciation

over 2 years No Salvage Value

quantity sold per year = 20,000

Price per unit = $50 at Time 0 2% inflation rate each year of the two years

Operating Cost = $20 per unit (all variable) at Time 0 1% inflation rate per year

Tax rate 25% cost of capital 10%

Project will have a 2 year life