The Lazy Mower

Topics: Net present value, Cash flow, Costs Pages: 5 (1047 words) Published: March 28, 2011
Scenario Analysis
-------------------------------------------------
Year| -------------------------------------------------
Scenario 1| ------------------------------------------------- Scenario 2| ------------------------------------------------- Scenario 3|
-------------------------------------------------
| -------------------------------------------------
15% Better| ------------------------------------------------- Stated Forecast| ------------------------------------------------- 15% Worse|
-------------------------------------------------
1| -------------------------------------------------
$ 34,500,000| ------------------------------------------------- $ 30,000,000| ------------------------------------------------- $ 25,500,000|
-------------------------------------------------
2| -------------------------------------------------
$ 39,100,000| ------------------------------------------------- $ 34,000,000| ------------------------------------------------- $ 28,900,000|
-------------------------------------------------
3| -------------------------------------------------
$ 44,620,000| ------------------------------------------------- $ 38,800,000| ------------------------------------------------- $ 32,980,000|
-------------------------------------------------
4| -------------------------------------------------
$ 41,515,000| ------------------------------------------------- $ 36,100,000| ------------------------------------------------- $ 30,685,000|
-------------------------------------------------
5| -------------------------------------------------
$ 39,330,000| ------------------------------------------------- $ 34,200,000| ------------------------------------------------- $ 29,070,000|
-------------------------------------------------
6| -------------------------------------------------
$ 39,330,000| ------------------------------------------------- $ 34,200,000| ------------------------------------------------- $ 29,070,000|
-------------------------------------------------
7| -------------------------------------------------
$ 38,783,750| ------------------------------------------------- $ 33,725,000| ------------------------------------------------- $ 28,666,250|
-------------------------------------------------
8| -------------------------------------------------
$ 36,225,000| ------------------------------------------------- $ 31,500,000| ------------------------------------------------- $ 26,775,000|
-------------------------------------------------
9| -------------------------------------------------
$ 35,707,500| ------------------------------------------------- $ 31,050,000| ------------------------------------------------- $ 26,392,500|
-------------------------------------------------
10| -------------------------------------------------
$ 35,190,000| ------------------------------------------------- $ 30,600,000| ------------------------------------------------- $ 26,010,000|

Sensitivity Analysis
Some examples of costs that could be sensitive to change would be both the fixed and variable costs associated with the project. See the chart below to compare how changes in these costs affect the NPV of the project.

NPV| FC| % change FC| % change in NPV|
| | | |
$ 45,037,905| 1,500,000| | |
$ 44,423,899| 2,000,000| 33%| -1.36%|
$ 42,702,581| 2,500,000| 67%| -5.19%|
$ 40,981,263| 3,000,000| 100%| -9.01%|
$ 39,259,945| 3,500,000| 133%| -12.83%|
$ 37,538,626| 4,000,000| 167%| -16.65%|
NPV| VC| % change VC| % change in NPV|
| | | |
$ 45,037,905| 400| | |
$ 40,122,683| 450| 12.5%| -10.9%|
$ 34,100,150| 500| 25.0%| -24.3%|
$ 28,077,616| 550|...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Lazy Mower Essay
  • Mower Essay
  • Essay on lazy
  • Lazy Lawnmower Essay
  • How to Not Be Lazy Essay
  • Essay on America the Lazy
  • Swisher Mower Case Essay
  • Swisher Mowers Case Essay

Become a StudyMode Member

Sign Up - It's Free