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NPV Sensitivity to Key Management Actions

1. NPV Sensitivity to Change in Unit Selling Prices at a Constant Discount Rate (10%)

The table below shows how NPV changes when the unit selling price increases from 25,000 per license to 60,000 per license. At the lowest price, 25,000, NPV is highly negative, -542,520. At 30,000 NPV increases but is still negative at -298,732. At the very high price of 60,000 NPV becomes very high, 2'263,996.

The investor will measure the risk of the investment by trying to ascertain whether the company can sell at prices above 40,000 to achieve 

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