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Determine the breakeven percentage changes

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The estimated cash flows of an investment project are shown below.

Item Estimated                                Cash Flows                              Sensitivity Range

Initial Investment,                          $ 55,000                                +/- 5%

Annual Revenue,                             $ 7,000                                +/- 10%

Annual Expense,                             $ 4,500                                +/- 10%

Market Value,                              $ 1,800                                 +/- 15%

Project life, years                          8                                        +/- 5%

Question 1: Using an interest rate of 2% per year, analyze the sensitivity of the PW to changes in initial investment and annual revenue, and determine the breakeven percentage changes of these two factors.

Reference no: EM132495604

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