Let's suppose we want to create a sensitivity analysis graph for NPV value, based on changes...
Let's suppose we want to create a sensitivity analysis graph for NPV value, based on changes in selling price
We have this table
| NPV | |||||
| Base case -selling price | 2291540 | ||||
| +10% selling price | 12231373 | ||||
| -10% selling price | -8148293 | ||||
| +20% selling price | 221971206 | ||||
| -20% selling price | -17288126 |
What graph you can select (tornado or other) and how will be the graph?
Homework Answers
Add Answer to:
Let's suppose we want to create a sensitivity analysis graph for
NPV value, based on changes...
You want to determine how changes in the price of a product affect a project's NPV...
You want to determine how changes in the price of a product affect a project's NPV and IRR. To best determine the impact, you would most likely use Scenario analysis. O a Base-case analysis. Ob. oc Multiple-outcome analysis. od Sensitivity analysis. Simulation analysis. Oe.
Please round the numbers to 3 decimal places Problem 9-20 Sensitivity Analysis [LO 3] We are...
Please round the numbers to 3 decimal places
Problem 9-20 Sensitivity Analysis [LO 3] We are evaluating a project that costs $2,130,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project Sales are projected at 90,600 units per year. Price per unit is $38.85, variable cost per unit is $23.95, and fixed costs are $860,000 per year. The tax rate is 25 percent, and we require a...
4. Sensitivity and scenario analysis Different techniques for analyzing project risk require different input variables...
4. Sensitivity and scenario analysis Different techniques for analyzing project risk require different input variables and assumptions. Suppose you are using the scenario analysis technique to evaluate project risk. You would change in the model to evaluate the effect of the input factors on the expected value. Tanya is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new project that her company is considering investing in. Her risk analysis report includes the sensitivity...
Problem 7-1 Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $1,160,000, has...
Problem 7-1 Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $1,160,000, has a ten-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 44,000 units per year. Price per unit is $45, variable cost per unit is $20, and fixed costs are $645,000 per year. The tax rate is 35 percent, and we require a return of 20 percent on this project....
We are evaluating a project that costs $889,000, has an 10-year life, and has no salvage...
We are evaluating a project that costs $889,000, has an 10-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 105,000 units per year. Price per unit is $38, variable cost per unit is $26, and fixed costs are $891,667 per year. The tax rate is 38 percent, and we require a 17 percent return on this project. Requirement 1: Break-Even (a) Calculate the accounting...
3 Problem 11-5 Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs...
3 Problem 11-5 Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs $691,200, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 85,000 units per year. Price per unit is $50, variable cost per unit is $35, and fixed costs are $740,000 per year. The tax rate is 24 percent, and we require a return of 10 percent on...
b) What is the sensitivity of NPV to changes in the sales figure? (Do not round...
b) What is the sensitivity of
NPV to changes in the sales figure? (Do not round
intermediate calculations and round your answer to 3 decimal
places, e.g., 32.161.)
e) If there is a $1 decrease in estimated variable costs, how
much would the OCF change? (Do not round intermediate
calculations and round your answer to the nearest whole number,
e.g., 32.)
We are evaluating a project that costs $1,920,000, has a 6-year life, and has no salvage value. Assume that...
Please provide an excel sheet for the calculations. 1. Perform a sensitivity analysis with data provided...
Please provide an excel sheet for the calculations. 1. Perform a sensitivity analysis with data provided Assume that your selected company is considering a potential project with a new product that is expected to sell for an average price of $22 per unit and the company expects it can sell 400 000 units per year at this price for a period of 4 years. Launching this project will require purchase of a $2 450 000 equipment that has residual value...
Based on your NPV Scenario / Risk Analysis Grids, is NPV more sensitive to changing cost...
Based on your NPV Scenario / Risk Analysis Grids, is NPV more
sensitive to changing cost of capital or changing salvage values?
How do you determine this?
Based on your NPV Scenario / Risk Analysis Grids, is NPV more
sensitive to changing cost of capital or changing year one sales
level assumptions? How do you determine this?
NPV Scenario/ Risk Analysis: Complete the grids below to report 5x5 Grids of NPV vs input variable changes noted NPV Analysis Grid: NPV...
(Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new...
(Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $98 each, and the company analysts performing the analysis expect that the firm can sell 107,000 units per year at this price for a period of five years, after which time they expect demand...
You want to determine how changes in the price of a product affect a project's NPV and IRR. To best determine the impact, you would most likely use Scenario analysis. O a Base-case analysis. Ob. oc Multiple-outcome analysis. od Sensitivity analysis. Simulation analysis. Oe.
Please round the numbers to 3 decimal places
Problem 9-20 Sensitivity Analysis [LO 3] We are evaluating a project that costs $2,130,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project Sales are projected at 90,600 units per year. Price per unit is $38.85, variable cost per unit is $23.95, and fixed costs are $860,000 per year. The tax rate is 25 percent, and we require a...
4. Sensitivity and scenario analysis Different techniques for analyzing project risk require different input variables and assumptions. Suppose you are using the scenario analysis technique to evaluate project risk. You would change in the model to evaluate the effect of the input factors on the expected value. Tanya is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new project that her company is considering investing in. Her risk analysis report includes the sensitivity...
Problem 7-1 Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $1,160,000, has a ten-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 44,000 units per year. Price per unit is $45, variable cost per unit is $20, and fixed costs are $645,000 per year. The tax rate is 35 percent, and we require a return of 20 percent on this project....
3 Problem 11-5 Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs $691,200, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 85,000 units per year. Price per unit is $50, variable cost per unit is $35, and fixed costs are $740,000 per year. The tax rate is 24 percent, and we require a return of 10 percent on...
b) What is the sensitivity of
NPV to changes in the sales figure? (Do not round
intermediate calculations and round your answer to 3 decimal
places, e.g., 32.161.)
e) If there is a $1 decrease in estimated variable costs, how
much would the OCF change? (Do not round intermediate
calculations and round your answer to the nearest whole number,
e.g., 32.)
We are evaluating a project that costs $1,920,000, has a 6-year life, and has no salvage value. Assume that...
Based on your NPV Scenario / Risk Analysis Grids, is NPV more
sensitive to changing cost of capital or changing salvage values?
How do you determine this?
Based on your NPV Scenario / Risk Analysis Grids, is NPV more
sensitive to changing cost of capital or changing year one sales
level assumptions? How do you determine this?
NPV Scenario/ Risk Analysis: Complete the grids below to report 5x5 Grids of NPV vs input variable changes noted NPV Analysis Grid: NPV...
(Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $98 each, and the company analysts performing the analysis expect that the firm can sell 107,000 units per year at this price for a period of five years, after which time they expect demand...
Most questions answered within 3 hours.
-
Write a program to solve the Josephus problem, with the following
modification:
Sample Input:
./a.out n...
asked 1 hour ago -
At the start of a CD it is spinning at a rate of 525 rpm
(revolutions...
asked 1 hour ago -
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 3 hours ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 4 hours ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 3 hours ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 4 hours ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 5 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 5 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 5 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 5 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 5 hours ago -
Why are polymers not typically casted into products?
asked 5 hours ago