Q1) The project produces a number of units needed for a power plant project for purposing of routine maintenance as shown in the following table: Sales Quantity 710 Thousands units Price for Sales Quantity Cost for Quantity Project life span (virtual) investment costs 11$ 9.5 $ 7 years 1330 Thousands $ 2 3 4 Note that (i= 9 %) for whole project life. Adopting of sensitive analysis to answer the following: 1) The test of the project net present value under the following situations: - A) current situation, B) under the economic changes: Reduced selling price per unit (10%). & (15%)increase in sales & 5% decrease in the cost of the unit produced. C) Draw a graphically for illustrating the two cases and explaining it from an economic point of view.

Q1) The project produces a number of units needed for a power plant project for purposing of routine maintenance as shown in the following table: Sales Quantity 710 Thousands units Price for Sales Quantity Cost for Quantity Project life span (virtual) investment costs 11$ 9.5 $ 7 years 1330 Thousands $ 2 3 4 Note that (i= 9 %) for whole project life. Adopting of sensitive analysis to answer the following: 1) The test of the project net present value under the following situations: - A) current situation, B) under the economic changes: Reduced selling price per unit (10%). & (15%)increase in sales & 5% decrease in the cost of the unit produced. C) Draw a graphically for illustrating the two cases and explaining it from an economic point of view.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 11P

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