Conduct a sensitivity analysis for each variable and range


Blooper’s analysts have come up with the following revised estimates for its magnoosium mine:

Range

Pessimistic Optimistic

Initial investment + 40 % – 20 %

Revenues – 25 % + 25 %

Variable costs + 20 % – 25 %

Fixed cost + 20 % – 30 %

Working capital + 40 % – 45 %

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.)

Project NPV

Pessimistic Expected Optimistic

Initial investment

Revenues

Variable costs

Fixed costs

Working capital

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Financial Management: Conduct a sensitivity analysis for each variable and range
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