Which variable most impacts profitability

Assignment Help Finance Basics

Reference no: EM13224415

The following finance problem:

A video rental store will cost $650,000 to open. Assuming annual sales of $1 million, variable costs of 35%, fixed costs od $300,000, depreciation of $100,000, and a tax rate of 35%, calculate the NPV of the project over a 10-year horizon (assume no inflation or salvage value) with a 12% cost of capital. (6 points)

Conduct a sensitivity analysis by allowing investment, sales, variable costs, and fixed costs to vary by PLUS 10% and MINUS 10% from their original estimates. Which variable most impacts profitability? (4 points)

Reference no: EM13224415

Questions Cloud

Supporters of globalization celebrate : What do the supporters of globalization celebrate? With regard to consumerism, immigration, and nutrition, which side—supporters or opponents—do you find more persuasive? Why?

National cancer registries work : You have recently accepted a promotion to work in the cancer registry of the hospital. You had to take some additional educational classes, but you feel the transition was worth the effort

Dealing with major international issues : "The state system is under siege – today, there are far more important actors than states which are important in dealing with major international issues."

Under a swing set at a day care center : which of the following surfaces would be best for use under a swing set at a day care center?

Which variable most impacts profitability : Conduct a sensitivity analysis by allowing investment, sales, variable costs, and fixed costs to vary by PLUS 10% and MINUS 10% from their original estimates. Which variable most impacts profitability?

Philosophical views comparison : Create a 5-7 slide PowerPoint presentation that compares the philosophical views of Love, Existence and Forms of three of the philosophers that you read about.

Exchange rate regimes by governments of the foreign countrie : Like many MNC, Nike is subject to the change in exchange rate regimes by governments of the foreign countries.

Discussion of three societal issues faced outside classroom : Discussion of three societal issues faced outside the classroom occurs. Description of role schools should play in teaching students values is discussed and strategies to help them overcome these challenges occurs

Describes the ideology of transcendentalists : Which of the following best describes the ideology of Transcendentalists?

User Account

All Pages