Blooper’s analysts have come up with the following revised estimates for its magnoosium mine:
Range
Pessimistic Optimistic
Initial investment + 40 % – 20 %
Revenues – 25 % + 25 %
Variable costs + 20 % – 25 %
Fixed cost + 20 % – 30 %
Working capital + 40 % – 45 %
Conduct a sensitivity analysis for each variable and range and compute the NPV for each. Use Spreadsheet 10.1 and accompanying data as a starting point for the analysis. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in thousands rounded to the nearest whole dollar.)
Project NPV
Pessimistic Expected Optimistic
Initial investment
Revenues
Variable costs
Fixed costs
Working capital