Determine how sensitive the decision to invest

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Reference no: EM13151178

Wolfpack, Inc., a textile manufacturing company, is considering opening a production and shipping facility to keep up with demand for its pillows. The facility is expected to require an initial investment of $190,000 and will have a $36,000 salvage value after 5 years. Net annual revenue is estimated to be $100,000. Determine how sensitive the decision to invest in the new facility is to the estimates of initial cost and net annual revenue. Use a MARR of 4% per year and a 5-year study period.

Reference no: EM13151178

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