Blooper’s analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic Optimistic Initial investment +40% –25% Revenues –25% +20% Variable costs, percent of revenues +20% –20% Fixed costs +35% –35% Working capital, percent of expected value +30% –35% 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. Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.
Blooper’s analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic Optimistic Initial investment +40% –25% Revenues –25% +20% Variable costs, percent of revenues +20% –20% Fixed costs +35% –35% Working capital, percent of expected value +30% –35% 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. Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.
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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Blooper’s analysts have come up with the following revised estimates for its magnoosium mine:
| Range | ||
|---|---|---|
| Pessimistic | Optimistic | |
| Initial investment | +40% | –25% |
| Revenues | –25% | +20% |
| Variable costs, percent of revenues | +20% | –20% |
| Fixed costs | +35% | –35% |
| Working capital, percent of expected value | +30% | –35% |
Conduct a sensitivity analysis for each variable and range and compute the
Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.
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