Blooper's analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic Optimistic Initial investment +50% -25% Revenues -15% +20% Variable costs, percent of revenues +10% -10% Fixed costs +50% -30% Working capital, percent of expected value +50% -50% 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. Project NPV Pessimistic Expected Optimistic Initial investment Revenues Variable costs Fixed costs Working capital
Blooper's analysts have come up with the following revised estimates for its magnoosium mine: Range Pessimistic Optimistic Initial investment +50% -25% Revenues -15% +20% Variable costs, percent of revenues +10% -10% Fixed costs +50% -30% Working capital, percent of expected value +50% -50% 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. Project NPV Pessimistic Expected Optimistic Initial investment Revenues Variable costs Fixed costs Working capital
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 12P
Related questions
Question
![Blooper's analysts have come up with the following revised estimates for its magnoosium mine:
Range
Pessimistic
Optimistic
Initial investment
+50%
-25%
Revenues
-15%
+20%
Variable costs, percent of revenues
+10%
-10%
Fixed costs
+50%
-30%
Working capital, percent of expected
value
+50%
-50%
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.
Project NPV
Pessimistic
Expected
Optimistic
Initial investment
Revenues
Variable costs
Fixed costs
Working capital](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0dc2cd3-e868-421c-a584-64d3f012cd32%2Fe8369203-63ae-42cd-92d5-9806c90af1ad%2F5m71s49_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Blooper's analysts have come up with the following revised estimates for its magnoosium mine:
Range
Pessimistic
Optimistic
Initial investment
+50%
-25%
Revenues
-15%
+20%
Variable costs, percent of revenues
+10%
-10%
Fixed costs
+50%
-30%
Working capital, percent of expected
value
+50%
-50%
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.
Project NPV
Pessimistic
Expected
Optimistic
Initial investment
Revenues
Variable costs
Fixed costs
Working capital
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