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
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
Related questions
Question
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education