Problem 9.20 – Project Sensitivity to Sales and Variable Costs

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition and 11th Edition

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Difficulty – Hard

Calculate the base-case operating cash flow and NPV, determine the sensitivity of NPV to changes in sales and OCF to changes in variable costs, and analyze the impact of changes in projected sales and variable costs on NPV and OCF.

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