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A Example of sensitivity B graph i am looking for E F 209 210 NPV (S) 211 $18,000 Price 212 $15,000 213 214 $12,000 215 $9,000 216 217 $6,000 Units 218 $3,000 219 220 $0 Equip. 221 -$3,000 222 223 -$6,000 224 -$9,000 225 VC/Unit -$12,000 226 227 -$15,000 228 -30% -15% 0% 15% 30% 229 % Deviation from Base 230 231 232 Deviation Data for Sensitivity Graph NPV with Variables at Different Deviations from Base 233 from Base Equip. Price Units VC/Unit 234 -30% $3,446 -$14,264 -$2,296 $13,037 235 0% $1,070 $1,070 $1,070 $1,070 236 30% -$1,306 $16,403 $4,436 -$10,898 237 Range $4,752 $30,667 $6,732 $23,935

A Example of sensitivity B graph i am looking for E F 209 210 NPV (S) 211 $18,000 Price 212 $15,000 213 214 $12,000 215 $9,000 216 217 $6,000 Units 218 $3,000 219 220 $0 Equip. 221 -$3,000 222 223 -$6,000 224 -$9,000 225 VC/Unit -$12,000 226 227 -$15,000 228 -30% -15% 0% 15% 30% 229 % Deviation from Base 230 231 232 Deviation Data for Sensitivity Graph NPV with Variables at Different Deviations from Base 233 from Base Equip. Price Units VC/Unit 234 -30% $3,446 -$14,264 -$2,296 $13,037 235 0% $1,070 $1,070 $1,070 $1,070 236 30% -$1,306 $16,403 $4,436 -$10,898 237 Range $4,752 $30,667 $6,732 $23,935

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Perform a sensitivity analysis graph and data table on the cost per unit, unit sales, and salvage value. Assume each of these variables can vary from its base- case, or expected, value by plus 0%, 10%, 20%, 30% and minus -10%, -20%, -30%. Discuss the results. An example of what I want is in the image. "Mini Case Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line would be set up in unused space in the main plant. The machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. The machinery has an economic life of 4 years, and Shrieves has obtained a special tax ruling that places the equipment in the MACRS 3-year class. The machinery is expected to have a salvage value of $25,000 after 4 years of use. The new line would generate incremental sales of 1,000 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. Each unit can be sold for $200 in the first year. The sales price and cost are both expected to increase by 3% per year due to inflation. Further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. The firm’s tax rate is 25%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%."
A Example of sensitivity B graph i am looking for E F 209 210 NPV (S) 211 $18,000 Price 212 $15,000 213 214 $12,000 215 $9,000 216 217 $6,000 Units 218 $3,000 219 220 $0 Equip. 221 -$3,000 222 223 -$6,000 224 -$9,000 225 VC/Unit -$12,000 226 227 -$15,000 228 -30% -15% 0% 15% 30% 229 % Deviation from Base 230 231 232 Deviation Data for Sensitivity Graph NPV with Variables at Different Deviations from Base 233 from Base Equip. Price Units VC/Unit 234 -30% $3,446 -$14,264 -$2,296 $13,037 235 0% $1,070 $1,070 $1,070 $1,070 236 30% -$1,306 $16,403 $4,436 -$10,898 237 Range $4,752 $30,667 $6,732 $23,935
Transcribed Image Text:A Example of sensitivity B graph i am looking for E F 209 210 NPV (S) 211 $18,000 Price 212 $15,000 213 214 $12,000 215 $9,000 216 217 $6,000 Units 218 $3,000 219 220 $0 Equip. 221 -$3,000 222 223 -$6,000 224 -$9,000 225 VC/Unit -$12,000 226 227 -$15,000 228 -30% -15% 0% 15% 30% 229 % Deviation from Base 230 231 232 Deviation Data for Sensitivity Graph NPV with Variables at Different Deviations from Base 233 from Base Equip. Price Units VC/Unit 234 -30% $3,446 -$14,264 -$2,296 $13,037 235 0% $1,070 $1,070 $1,070 $1,070 236 30% -$1,306 $16,403 $4,436 -$10,898 237 Range $4,752 $30,667 $6,732 $23,935
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