spreadsheet 10.1 Blooper's analysts have come up with the following revised estimates for its magnoosium mine:RangeInitial investmentRevenuesVariable costsFixed costWorking capitalInitial investmentPessimistic Optimistic+45%RevenuesVariable costsFixed costsWorking capital- 15%+ 25%+ 20%+ 20%Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 andaccompanying data as a starting point for the analysis. (Do not round intermediate calculations. Negativeamounts should be indicated by a minus sign. Enter your answers in thousands rounded to the nearest wholedollar.)25%+ 25%- 25%- 25%30%PessimisticProject NPVExpectedOptimistic A. InputsInitial investment ($ thousands)Salvage value ($ thousands)Initial revenues ($ thousands)Variable costs (% of revenues)Initial fixed costs ($ thousands)Inflation rate (%)Discount rate (%)Receivables (% of sales)Inventory (% of next year's costs)Tax rate (%)B. Fixed assetsInvestments in fixed assetsSales of fixed assetsCash flow from fixed assetsC. Operating cash flowRevenuesVariable expensesFixed expensesDepreciationPretax profitTaxProfit after taxOperating cash flowD. Working capitalWorking capitalChange in working capitalCash flow from investment in working capitalE. Project valuationTotal project cash flowDiscount factorPV of cash flowNet present valueYear:10,0002,00015,00040.0%4,0005.0%12.0%16.7%15.0%21.0%010,000-10,0001,5001,500-1,500115,0006,0004,0002,0003,0006302,3704,3704,0752,575-2,5750.4081,7950.893215,750 16,5386,3006,6154,2004,4102,0002,0003,2503,5136837382,5684,5684,279204-2040.408-11,5004,3641.0000.797-11,500 1,603 3,4796,113.132,7754,7754,493214-2140.4084,5610.7123,246417,3646,9464,6312,0003,7887962,9934,9934,717225-2250.4084,7680.6363,030518,2337,2934,8622,0004,0788563,2215,2213,039-1,6791,6790.2506,9000.5673,91561,5801,5800-3,0393,0394,6190.5072,340

Answered: Image /qna-images/answer/f76e0e5d-5043-46ec-9ffd-6bfcda498634.jpg

Blooper's analysts have come up with the following revised estimates for its magh Range Initial investment Revenues Variable costs Fixed cost Working capital Pessimistic Optimistic +45% - 15% -25% + 25% 25% -25% 30% + 25% + 20% + 20% -

Blooper's analysts have come up with the following revised estimates for its magh Range Initial investment Revenues Variable costs Fixed cost Working capital Pessimistic Optimistic +45% - 15% -25% + 25% 25% -25% 30% + 25% + 20% + 20% -

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

spreadsheet 10.1

Blooper's analysts have come up with the following revised estimates for its magnoosium mine:
Range
Initial investment
Revenues
Variable costs
Fixed cost
Working capital
Initial investment
Pessimistic Optimistic
+45%
Revenues
Variable costs
Fixed costs
Working capital
- 15%
+ 25%
+ 20%
+ 20%
Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 and
accompanying data as a starting point for the analysis. (Do not round intermediate calculations. Negative
amounts should be indicated by a minus sign. Enter your answers in thousands rounded to the nearest whole
dollar.)
25%
+ 25%
- 25%
- 25%
30%
Pessimistic
Project NPV
Expected
Optimistic

A. Inputs
Initial investment ($ thousands)
Salvage value ($ thousands)
Initial revenues ($ thousands)
Variable costs (% of revenues)
Initial fixed costs ($ thousands)
Inflation rate (%)
Discount rate (%)
Receivables (% of sales)
Inventory (% of next year's costs)
Tax rate (%)
B. Fixed assets
Investments in fixed assets
Sales of fixed assets
Cash flow from fixed assets
C. Operating cash flow
Revenues
Variable expenses
Fixed expenses
Depreciation
Pretax profit
Tax
Profit after tax
Operating cash flow
D. Working capital
Working capital
Change in working capital
Cash flow from investment in working capital
E. Project valuation
Total project cash flow
Discount factor
PV of cash flow
Net present value
Year:
10,000
2,000
15,000
40.0%
4,000
5.0%
12.0%
16.7%
15.0%
21.0%
0
10,000
-10,000
1,500
1,500
-1,500
1
15,000
6,000
4,000
2,000
3,000
630
2,370
4,370
4,075
2,575
-2,575
0.408
1,795
0.893
2
15,750 16,538
6,300
6,615
4,200
4,410
2,000
2,000
3,250
3,513
683
738
2,568
4,568
4,279
204
-204
0.408
-11,500
4,364
1.000
0.797
-11,500 1,603 3,479
6,113.1
3
2,775
4,775
4,493
214
-214
0.408
4,561
0.712
3,246
4
17,364
6,946
4,631
2,000
3,788
796
2,993
4,993
4,717
225
-225
0.408
4,768
0.636
3,030
5
18,233
7,293
4,862
2,000
4,078
856
3,221
5,221
3,039
-1,679
1,679
0.250
6,900
0.567
3,915
6
1,580
1,580
0
-3,039
3,039
4,619
0.507
2,340

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