1. Create a Base Case using the following information. A project has an estimated investment in equipment of $440 million. Transportation and installation costs are $60 million. The investment will be depreciated using the MACRS factors provided below. The equipment has gross salvage value at the end of 5 years of $50 million. The project requires $35 million in net working capital initially and will have changes in networking capital each year equal to 15% of the projected change in revenue for the following year. It will generate 86 million per year in unit sales in Year 1 which is expected to increase by 5% each year thereafter. The expected sale price in Year 1 is $2.87 per unit and is projected to increase by 3% per year thereafter. The fixed costs are estimated at $30 million in Year 1 and is expected to increase by 5% each year thereafter. Variable costs are estimated to be $0.78 per unit in Year 1 and it is expected to increase by 3% per year thereafter. The firm's tax rate is 30% and the WACC is the lesser of the WACC that you calculate or 10%.

2. Perform Sensitivity Analysis on the Base Case created in #1. Recalculate the NPV with a +/- 30% sensitivity for unit sales, fixed costs and net capital spending. Create a table with your results and create a graph (the sensitivity spider web).