Question

Given the information below, calculate the NPV's for the following scenarios:
1	Unit price goes up by 10%
2	Variable price goes up by 10%
3	Unit sales goes down by 10%
4	Fixed price goes up by 10%
Base information remains the same between scenarios except for the variables 1-4.
Which scenerio is the most sensitive and why?
Base Info
Unit price	$                   120
Variable cost per unit	$                     70
Fixed Costs	$           240,000
Expected Sales	10,000
Required rate of return	10%
Tax Rate	21%
Cost of machine	$       1,000,000
Salvage Value	$                      -
Life	10	Years
Working Capital Increase	$                      -

Answer 1