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Project Analysis - Coggle Diagram
Project Analysis
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Sensitivity Analysis
Purpose:
- Assess potential deviations from the forecasted outcomes.
- Determine the risks and implications of surprise events.
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Definition:
Analyzing the impact of varying key project variables (optimistic vs. pessimistic) on NPV.
Sensitivity Table:
Variables: Capital Investment, Working Capital, Units Sold, Unit Price, COGS, Fixed Costs.
Optimistic/Pessimistic Deviations: e.g., Capital Investment variation from -30% to +50%, Units Sold from +30% to -25%.
Impact on NPV:
Optimistic/ Pessimistic NPVs listed for each variable, such as 5.77 billion (optimistic) or -4.22 billion (pessimistic) for capital investment.
Operating Leverage
Definition:
- The degree to which fixed costs impact profitability.
- High fixed costs = High operating leverage.
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