Conch Republic Electronics is a midsized electronics manufacturer located in key west, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founded over 70 years ago. Over the years, the company has expanded, and it is now a reputable manufacturer of various specialty electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company in its finance department. One of the major revenue-producing items is a smartphone. The Conch Republic currently has one smartphone model on the market and sales have been excellent. The smartphone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smartphone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smartphone that has all the features of the existing one but adds new features such as wifi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smartphone. The Conch Republic can manufacture the new smartphone for $199 each in variable costs. Fixed costs for the operation are estimated to run $5.5 Million per year. The estimated sales volume is $115,000, $115,000, $90,000,$75,000 and $54,000 per year for the next five years,, respectively. The unit price of the new smartphone will be $485. The necessary equipment can be purchased for $60 Million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $6.25 Million. Networking capital for the smartphone will be 22% of sales and will occur with the time of cash flows for the year. (i.e. there is no initial outlay for NWC) Changes in NWC will thus first occur in year 1 with the first year's sales. The Conch Republic has a 22% tax rate and a required return of 12%. Shelly has asked to prepare a report that answers the following questions. What is the payback period for the project? What is the profitability index of the project? What is the IRR? What is the NPV of the project? How sensitive is the NPV to change in the price of the new smartphone? How sensitive is the NPV to change in the quantity sold? Should Conch Republic produce the new smart phone? Please solve in excel and give explanations. Thank you.