What Is The Major Engineering Major Case Study Answers

Sensitivity analysis begins with the base case (or for this analysis, the “most likely case”) developed using expected values for all uncertain variables. The uncertain variables used in this analysis are procedures per day, average net revenue, and building/equipment salvage value.

AE = Profitability and/or decision analysis is applied appropriately in the analysis of at least three strategic alternatives and at least one other relevant performance management concept or tool is applied appropriately in the quantitative analyses;

Using the scenario information supplied, the candidate will undertake a cost-benefit analysis for high-priority change requirements, undertake a risk analysis, identify barriers, and develop

A careful analysis on the sensitivity is necessary in order to make sound business decisions.

4) A sensitivity analysis could help Alltel pavilion assess potential risks/rewards associated with changes in costs or sales volume. A What-if analysis would be helpful to determine profits given variations in sales. If the pavilion had a strong inclination as to the draw of a particular artist, this would give them the

The first project proposal is Match My Doll Clothing line expansion consisted of expanding matching doll and child’s clothing and accessories. The second project proposal is Design Your Own Doll by creating customizable “one of a kind” doll features through the company’s website. The project selection criteria would base on quantitative and qualitative analysis. The quantitative analysis would base on the evaluation of discounting cash flow forecasts to determining the Net Present Value (NPV), Internal Rate of Return (IRR), and the Payback period of each proposed project. The qualitative analysis would include the potential project value of the company’s overall strategy, innovation, key project risks, and the project interdependencies to the whole company.

Financial Analysis The sensitivity analysis on IRR provided by the case in Exhibit 9 is demonstrated in Table 3 in Appendix. With reference to the calculated WACC, 11.22%, most of the circumstances considered in the sensitivity analysis suggest the acceptance of the 7E7 project. However, if the air travel demand worsened and sold only 1500 in the first 20 years, the project will be abandoned even if there is a 5% premium in price. If the unit volume sold is equal to

The present value of the net incremental cash flows, totaling $5,740K, is added to the present value of the Capital Cost Allowance (CCA) tax shield, provided by the Plant and Equipment of $599K, to arrive at the project’s NPV of $6,339K. (Please refer to Exhibit 4 and 5 for assumptions and detailed NPV calculations.) This high positive NPV means that the project will add a significant amount of value to FMI. In addition, using the incremental cash flows (excluding CCA) generated by the NPV calculation, we calculated the project’s IRR to be 28%. This means that the project will generate a higher rate of return than the company’s cost of capital of 10.05%. This is also a positive indication that the company should undertake the project.

Super Project will eat into the Jell-O Sales and this must be taken as a cost for the project when making the final decision.

Sensitivity analysis allows a change in one particular variable of simulation. This shows how a project is affected by the change. It shows us what can happen in a project with different input

Furthermore, a sensitivity analysis of factors such as the cost of raw materials, selling price per unit and capacity utilization demonstrates that a small change in any one of these variables could have a major impact on the project’s bottom line. In Appendix B, I examine a scenario in which the selling price per unit decreases by 1% and the cost of raw materials per unit increases by 1% at the outset of the project. In this scenario, the resulting NPV changes from a positive $5.4 million to a loss of $666,000, and the IRR falls below the discount rate to 9.15%. This, to me, reveals that the potential upside of this project is not large enough to account for discrepancies due to imprecise projections, flawed assumptions, or unforeseen risks.

All of the 11 projects are primarily ranked based on quantitative measurements. We have to also take into consideration of other quantitative aspects like length of the project, initial investment and anticipated payback period. Moreover, this

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

NPV analysis uses future cash flows to estimate the value that a project could add to a firm’s shareholders. A company director or shareholders can be clearly provided the present value of a long-term project by this approach. By estimating a project’s NPV, we can see whether the project is profitable. Despite NPV analysis is only based on financial aspects and it ignore non-financial information such as brand loyalty, brand goodwill and other intangible assets, NPV analysis is still the most popular way evaluate a project by companies.

A key activity in project management is assessing project constraints. A project has three limitations: scope, budget and schedule. These limitations are project constraints because they are sensitive to change and have an impact on project risk. Risk is exposure to uncertain outcomes. Project constraints are mutually exclusive. If one constraint changes it affects the others and adjustments may be required to compensate and manage risks. For example, a delay in the schedule can increase the risk that the project will not finish on time. Time is money and delays have a negative impact on the budget. To