9. Claybridge Companies is considering tumblers will be $450,000. The CFO\' $8.5
ID: 2787570 • Letter: 9
Question
9. Claybridge Companies is considering tumblers will be $450,000. The CFO' $8.50 each and production CFO expects to be able to sell the used equipment for a new line of tumblers. The initial investment for machinery to make the s best guess is that Claybridge will be able to sel 30,000 tumblers per year at costs will be $3.00 per unit. The machinery will be in place for 4 years, after which the $85,000. The CFO is now using sensitivity analysis to identify high impact of the appropriate inputs. The output of the sensitivity analysis is: variables before doing a more thorough analysis 240,000 Unit Price 160,000 Units Sold 80,000 Salvage Value 0 -80,000 -160,000 -20% 20% 30% -10% 0% 10% % Deviation from Base -30% Based on the sensitivity analysis, the project's NPV is least sensitive to changes in the: a. WACC. b. salvage value. c. unit price. d. number of units sold.Explanation / Answer
Slope of NPV profile is most change with Unit price. So, at init price, NPV is most sensitive. lease change in slope of slope is at salvage value. So salvage value is least sensitive in NPV calculation.
Option (B) is correct answer.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.