CONCH REPUBLIC

ELECTRONICS, PART 2
Manajemen Keuangan
Labib Zainul Aziz
6032211211
Shelley Couts, the owner of Conch Republic Electronics, had received the capital budgeting
analysis from Jay McCanless for the new smart phone the company is considering. Shelley was
pleased with the results, but she still had concerns about the new smart phone. Conch Republic
had used a small market research fi rm for the past 20 years, but recently the founder of that firm
retired. Because of this, she was not convinced the sales projections presented by the market
research fi rm were entirely accurate. Additionally, because of rapid changes in technology, she
was concerned that a competitor could enter the market. This would likely force Conch Republic
to lower the sales price of its new smart phone. For these reasons, she has asked Jay to analyze
how changes in the price of the new smart phone and changes in the quantity sold will affect the
NPV of the project.
Shelley has asked Jay to prepare a memo answering the following questions.

How Sensitive is the NPV to changes in the How Sensitive is the NPV to changes in the
price of the new smart phone? quantity sold of the new smart phone?
Sensitivity to Change in price
Sensitivity to Change in price
Sensitivity to Change in price
Sensitivity to change in quantity
Sensitivity to change in quantity
Sensitivity to change in quantity
 Conclusion

OUR CONCLUSION IS THAT SMARTPHONE IF OTHER MODELS REGISTER LOWER SALES SINCE NPV IS POSITIVE, THE PROJECT IS
PROJECT IS A GOOD INVESTMENT. DUE TO INTRODUCTION OF THE NEW PROFIT MAKING. SO, CONCH REPUBLIC
MODEL THEN THE LOS IS SALES WILL BE SHOULD PRODUCE THE NEW SMARTPHONE.
PART OF THE NPV ANALYSIS
THANK YOU W
LABIB ZAINUL AZIZ
6032211211
Conch republic electronics, part 2