Now that you have arrived at Value for Buccaneers of the Bahamas, you want to do some testing. You first want to know what the breakeven NPV if all the original inputs are correct.
Part I: You should copy the original Valuation (with growth in cash flows) to 2 new worksheets (you are allowed to copy the entire sheet with a right click) in order to perform breakeven so that your original work is still there for grading. Title these worksheets “Breakeven” and "NPV 1 million". If you cannot copy a sheet as you usually do, you can go to the home tab, in the center is a "Format" (under "Insert" and "Delete"); you can "move or copy" from there; just make sure to make a copy.
Question 1: How much would they have to charge as a price per schooner to get breakeven?
Question 2: If the goal is to get to an NPV of $1 million, what price per schooner would you have to charge?
Part 2: Because you are unsure of your inputs in your analysis, you decide to do some sensitivity around some of those inputs. You are most concerned about the growth in price of the units sold and the variable costs. You decide to run a sensitivity around these variables with the following ranges:
Growth in price per unit between 2% and 5% (in .25% increments)
Variable costs from 55% to 65% of Revenues (in 1% increments)