Could you assist with showing me how to put my answers into Excel, performing a sensitivity analysis .
Use the information from Assignment 2 to perform a sensitivity analysis using Excel. Assume that each scenario that follows is independent of the others. Unless stated otherwise, the variables are the same as in the base case.
1. How will total profit change if the Laser sales price increases by 10%? No Change
Answer: Based on the information given, a 10% increase in Laser sales will not affect the profit margin of $1,000,000.00. A total of 5667 printers provides an additional $701.00 in profit revenues.
2. How will total profit change if the Inkjet sales volume decreases by 4,000 units and the sales volume of other products remains the same?
Answer: Based on the information given, the profit change will result in more printers needing to be sold for $1,000,000.00 profit margin and the annual revenues will decrease from $21,042,000.00 to $16,559,121.00. Resulting in a total of 3,694 needed to be sold to break-even and thus show a profit in sales.
3. How will total profit change if fixed costs decrease by 20%?
Answer: Based on the information given, a decrease in original fixed costs totaling $5,250,000.00 will result in a recalculated fixed cost of $4,200,000.00. A fixed cost of $4,200,000.00 will increase the profit because it will cost less to produce the same quantity of printers. The original profit would be $21,042,000.00. A 20% decrease in fixed costs will produce a profit of $22,092,000.00.
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