Posted: September 17th, 2017

# How to Perform a sensitivity analysis

Assignment Requirements.

1.Calculate the current weighted average cost of capital for CWC.

2.Calculate the appropriate discount rate for the healthy bottled water project.

3.Perform a sensitivity analysis for sales price, variable costs, fixed costs, and unit sales at +/- 10%, 20%, and 30% from the base case.

4.Perform an analysis of the following two scenarios:

Best case: Selling 2,500,000 units at a price of \$1.24 each, with variable production costs of \$0.22 per unit.

Worst case: Selling 950,000 units at a price of \$1.32 per unit, with variable production costs of \$0.27 per unit.

Explain if the firm should undertake the healthy bottled water project.

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