Question 1The Annual Cash flow can be between ÃÂ39.040 negative to ÃÂ273.180 positive according to pessimistic and optimistic scenarios accordingly, which are the sums of Capital Allowance and Profit after Tax (see attached Excel file). This figure is actually influenced by the uncertain parameters that are given in the case study (Hours Flown, Charter Price/Hour, Ticket Price/Hour, Capacity of Schedules Flights, Ratio of charter flights and Operating Cost/hour).
Question 2Optimistic vs. Pessimistic% change in uncertain parameter % change in cash flowCapacity of Sch. Flights 60%504%Ticket Price/Hour63%359%Pessimistic vs. OptimisticCapacity of Sch. Flights -38%-83%Ticket Price/Hour -38%-78%As it is depicted in the attached excel file, the higher (more optimistic) the forecast sizes of the uncertain parameters are the higher the Cash flow value they result in. However, Ticket Price/Hour and Capacity of scheduled flights seem to be the most important since their shift results in significant change on the Cash flow size. More specific, Capacity of Scheduled flight is the parameter with the highest downside effect.
The least important uncertain parameters are Operating Cost/hour and Ratio of charter flights.
The above results are indicated by the Range of cash flows between optimistic and pessimistic scenarios (see attached excel file for summary table and one-way data tables) and the relevant Tornado diagram provided right below.
From the @RISK regression analysis we can see that the highest coefficient calculated is for Ticket Price/Hour (0,588) and Capacity of scheduled flights (0,531), thus verifying the claim that these two uncertain parameters are the most important, since a change on these parameters have the highest multiplicative effect on cash flow. Similarly, one can see that the lowest coefficients are for Operating Cost/hour and Ratio of charter flights (-0,133 and 0,074 respectively).
If we vary the two most important parameters together (two-way data table) as shown in the table...