1. avatar says

    Hey John, Why u didn’t do cost of captial sensitivity? However I done it by my self and the IRR comes = 15.842%. I took 20% as another npv that resulted in ($26306).

    Now as per your formulae: NPV/PV of changes x 100% = 15%/15.842% x 100% = ~95%

    BUT I think its wrong?

    • Avatar of John Moffat says

      At present the NPV is 5329, and we need to know the % fall in sales volume that will give NPV of zero.

      If the sales volume per year falls, then the contribution per year falls, and therefore so too will be present value of the contribution flows. At present the present value of the contribution flows is 241189 – we need this to fall by 5329, which is a 2.2% fall.

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