Please show your work through formulas not just in a Excel spreadsheet The managers of a company are considering an investment with the following estimated cash flows. MARR is 20% peryear. The company is inclined to make the investment; however, the managers are nervous because all of the cash flowsand the useful life are approximate values. The capital investment is known to be within +5%. Annual expenses areknown to be within + 12%. The annual revenue, market value, and useful life estimates are known to be within +20%.a. Analyze the sensitivity of PW to changes in each estimate individually. Based on your results, make a recommendationregarding whether or not they should proceed with this project. Graph your results for presentation to management.b. The company can perform market research and/or collect more data to improve the accuracy of these estimates. Rankthese variables by ordering them in accordance with the need for more accurate estimates (from highest need to lowestneed).Capital investment $30,000Annual revenues $21,000$6,000$500Useful life 15 yearsAnnual expensesMarket valueClick the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year. - 20%$4Useful life%+ 20%$4%24%24

Given information Initial capital 30000 Revenue 21000 Cost 6000 N 15 MARR 20%

The managers of a company are considering an investment with the following estimated cash flows. MARR is 20% per vear. The company is inclined to make the investment; however, the managers are nervous because all of the cash flows and the useful life are approximate values. The capital investment is known to be within +5%. Annual expenses are known to be within +12%. The annual revenue, market value, and useful life estimates are known to be within ±20%. a. Analyze the sensitivity of PW to changes in each estimate individually. Based on your results, make a recommendation egarding whether or not they should proceed with this project. Graph your results for presentation to management. o. The company can perform market research and/or collect more data to improve the accuracy of these estimates. Rank hese variables by ordering them in accordance with the need for more accurate estimates (from highest need to lowest need). Capital investment $30,000 Annual revenues $21,000 Annual expenses $6,000 Market value $500 Useful life 15 years Click the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year.

The managers of a company are considering an investment with the following estimated cash flows. MARR is 20% per vear. The company is inclined to make the investment; however, the managers are nervous because all of the cash flows and the useful life are approximate values. The capital investment is known to be within +5%. Annual expenses are known to be within +12%. The annual revenue, market value, and useful life estimates are known to be within ±20%. a. Analyze the sensitivity of PW to changes in each estimate individually. Based on your results, make a recommendation egarding whether or not they should proceed with this project. Graph your results for presentation to management. o. The company can perform market research and/or collect more data to improve the accuracy of these estimates. Rank hese variables by ordering them in accordance with the need for more accurate estimates (from highest need to lowest need). Capital investment $30,000 Annual revenues $21,000 Annual expenses $6,000 Market value $500 Useful life 15 years Click the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 7E

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