Problem

Otobai’s staff (see Section 10-2) has come up with the following revised estimates for the...

Otobai’s staff (see Section 10-2) has come up with the following revised estimates for the electric scooter project:

 

Pessimistic

Expected

Optimistic

Market size

.8 million

1.0 million

1.2 million

Market share

.04

.1

.16

Unit price

¥300,000

¥375,000

¥400,000

Unit variable cost

¥350,000

¥300,000

¥275,000

Fixed cost

¥5 billion

¥3 billion

¥1 billion

Conduct a sensitivity analysis using the “live” spreadsheets (available at www.mhhe.com/ bma). What are the principal uncertainties in the project?

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Solutions For Problems in Chapter 10