Write a brief report on below sensitivity analysis and scenario analysis to improve your capital...

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Accounting

Write a brief report on below sensitivity analysis and scenario analysis to improve your capital budgeting analysis.

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We have identified 3 factors affecting the NPV: - Presently based on Market Research Selling Price Variable Cost No. of Units Sold Variable Parameter Selling Price Constant Parameters No. of Units Sold Variable Cost Price Units Sold Price 20000 20000 20000 20000 20000 20000 250 5000000 250 5000000 250 5000000 250 5000000 250 5000000 250 5000000 Revenue Change Variation Impact NPV - Investment 251,589 104,802 461,192 275 E 1,886,756 15% 37.5 287.5 2,243,147 2,599,538 -20% 15% -10% 10% 200-E 37.5212.5E 25 20% Variable Parameter No. of Units Sold Variable Cost Sales Units Sold Price Revenue Change Variation Impact NPV- Investment 10% 2000 22000 E 1,886,756 461,192 E 2,243,147 104,802 20% 24000| 2,599,538 251,589 Parameters 20000 20000 20000 20000 20000 20000 250 5000000 250 5000000 250 5000000 250 5000000 250 5000000 250 5000000 -10961-2000 15% Selling Price 18000f 300017000 -20% -4000 16000-E Variable Parameter Variable Cost Constant Cost Units Sold Price Change Variation Impact NPV - Investment 831,839 108 1516,109 660,771 102 1,687,177 489,704 96 1,858,245 147,568 84 2,200,380 Parameters 120 120 120 120 120 120 120 120 10% -10% 15% 15% 20% -20% 30% 12 12 Variable Cost No. of Units Sold20000 20000 20000 20000 20000 20000 20000 20000 132 E Selling Price 250 250 18 144 250 250 250

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