Answer Happy

4.4 The Reinh, Transportation Company is planning to buy a new fleet of trucks requiring an initial investment of $1,000,000, and $2,500,000 annually to maintain and operate. The expected life of the new fleet is 10 years. The revenue is estimated to be $5,000,000 per year and the salvage value is expected to be $250,000. The MARR is 18%. Conduct a sensitivity analysis based on the given information A) Calculate the PW of the Base case based on above given data. (Do not use AW or FW) [2 point] B) Calculate the PW for the range of -10% to +15% for initial cost. (Do not use AW or FW) [4 point] C) Calculate the PW for the range of -8% to +12% for annual revenue. [4 points] D) Prepare a tabular distribution by using PW as FOM. [5 points) Parameter % Change in Parameter Value FOM (AW) Deviation from base % Deviation from base Initial Cost Upper limit Base Case Lower limit Annual Revenue Upper Limit Base Case Lower limit Rank order the input variables for their impact of the PW. [2 points] % Change in % Change in Parameter Sensitivity Ratio Parameter FOM Initial Cost Rank Order Upper limit Lower limit Annual revenue Upper limit Lower limit F) Prepare a sensitivity graph comparing the percentage of change in parameter from the base case and the respective PW. [2 points]