d.

1 SENSITIVITY ANALYSIS

d.1.1 Introduction
A sensitivity analysis determines how different values of an independent variable affect a
particular dependent variable under a given set of assumptions. In other words, sensitivity
analyses study how various sources of uncertainty in a mathematical model contribute to
the model's overall uncertainty. This technique is used within specific boundaries that
depend on one or more input variables.

Sensitivity analysis is used in the business world and in the field of economics. It is
commonly used for financial analysis and economic analysis. It is also known as a what-
if analysis.

d.1.1.1. Situation-1: Increasing product life 10 years, other things remaining the same
d.1.1.2. Situation-2: Decreasing product life 10 years, other things remaining the same

d.1.2 Situation-1: Situation Analysis with respect to Financial Analysis:

Normally the Financial Analysis, Net present value (NPV), benefit-cost ratio (BCR) and
internal rate of return (IRR) of Zonal and Ward complex buildings were calculated
considering 50 years of life. A calculation was done considering the fact that if life of the
product increases 10 years then what benefits may arise? From the calculation it was
found that NPV, BCR and IRR value stand higher than real analysis. That is the project
becomes more viable for financial point of view. Details can be seen in Table-10.1 and
Annex-D.

Table 10.1: Situation-1: Financial Analysis- Increasing life of the Product

Sl.No Parameters Unit Results

.
1 Net Present Value (NPV) at 12% discount rate Lakh BDT 39389.1
8
2 Benefit-Cost Ratio (BCR) at 12% discount rate Ratio 1.60
3 Internal Rate of Return (IRR) Percetage] 21.60

d.1.3 Situation-1: Situation Analysis with respect to Economic Analysis:

Normally the Economic Analysis, Net Present Value (NPV), Benefit-Cost Ratio (BCR)
and Internal Rate of Return (IRR) of Zonal and Ward complex buildings were calculated
considering 50 years of life. A calculation was done considering the fact that if life of the
product increases 10 years then what benefits may arise? From the calculation it was
found that NPV, BCR and IRR stand more than real analysis. That is the project becomes
more viable economic point of view. Details can be seen in Table-10.2 and Annex-D.
 Table 10.2: Situation-1: Economic Analysis-Increasing life of the Product
Sl.No Parameters Unit Results
.
1 Net Present Value (NPV) at 12% discount rate Lakh BDT 139695.37
2 Benefit-Cost Ratio (BCR) at 12% discount rate Ratio 3.37
3 Internal Rate of Return (IRR) Percetage 38.36

d.1.4.1 Situation-2: Situation Analysis with respect to Financial Analysis:

Normally the Financial Analysis, Net Present Value (NPV), Benefit-Cost Ratio (BCR)
and Internal Rate of Return (IRR) of Zonal and Ward complex buildings were calculated
considering 50 years of life. A calculation was done considering the fact that if life of the
product decrease 10 years then what benefits may arise? From the calculation it was
found that NPV, BCR and IRR stand lower than previous analysis. That is the project
becomes less viable for financial point of view. Details can be seen in Table-10.3 and
Annex-E.

Table 10.3: Financial Analysis-Decreasinng Life of the Product

Sl.N Parameters Unit Results
o.
1 Net Present Value (NPV) at 12% discount rate Lakh BDT 34990.85
2 Benefit-Cost Ratio (BCR) at 12% discount rate Ratio 1.55
3 Internal Rate of Return (IRR) Percetage] 21.31

d.1.4.2 Situation-2: Situation Analysis with respect to Economic Analysis:

Normally the Financial Analysis, Net Present Value (NPV), Benefit-Cost Ratio (BCR)
and Internal Rate of Return (IRR) of Zonal and Ward complex buildings were calculated
considering 50 years of life. A calculation was done considering the fact that if life of the
product decrease 5 years then what benefits may arise? From the calculation it was found
that NPV, BCR and IRR stand lower than previous analysis. That is the project becomes
less viable both for economic point of view. Details can be seen in Table-10.4 and
Annex-F.

Table 10.4: Economic Analysis -Decreasing Life of the Product

Sl.No Parameters Unit Results
.
1 Net Present Value (NPV) at 12% discount rate Lakh BDT 133115.01
2 Benefit-Cost Ratio (BCR) at 12% discount rate Ratio 3.31.
3 Internal Rate of Return (IRR) Percetage] 38.29