2. Robo Cash is considering introducing a new line of higher end produces. Below are...
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2. Robo Cash is considering introducing a new line of higher end produces. Below are the company's forecast of financial data for the new products. Price per unit Quantity Variable Cost per unit Fixed Costs CCA rate Capital Investment WACC $15 300,000 $8 $1,750,000 20% $3,750,000 13.6% Calculate the project's NPV based on a 5 year life, using straight-line CCA (ignore the half year rule). a) How sensitive is NPV to a 4% reduction in price? b) How sensitive is NPV to a 6% reduction is quantity? c) And how sensitive is NPV to a 5% increase in variable costs
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