Principles of Corporate Finance

Sensitivity Analysis

Example - continued
NPV Calculations for Pessimistic Market Size Scenario

Net Cash Flow - 15 3.38 NPV= +5.7 bil yen

Operating cash flow 3.38

Profit after tax 1.88

.Taxes @ 50% 1.88

Pretax profit 3.75

Depreciation 1.5

Fixed Costs 3

Variable Costs 33

Sales 41.25

Investment - 15

Year 0 Years 1 - 10

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