Consider the example of sensitivity analysis

Additional sales 3000 units

Initial investment -40000

Market price 4 dollars

Marginal tax rate 30%

Cost per unit 0.8 dollars

Fixed costs 600 dollars

Salvage value 4000 dollars

Discount rate 8%

Cash Flows:

(Period 0 ) - 400000

(Period 1 ) 8700

(Periond 2) 8700

(Periond 3) 8700

(Periond 4) 8700

(Periond 5) 8700

(Periond 6) 6300

(Periond 7) 6300

(Periond 8) 6300

(Periond 9) 6300

(Periond 10) 9100

NPV: $13,152.96

IRR: 15.25%

QUESTION:

What happens to the NPV and the IRR of the project when the cost per unit goes from 0.8 to 2 dollars?

1. The IRR is unchanged, and the NPV goes to $-1,235.
2. The IRR goes to 5.7%, and the NPV goes to $-3,756.
3. The IRR goes to 7.2%, and the NPV goes to $-1,235.
4. The IRR goes to 7.2%, and the NPV goes to $-3,756.

Please show the detailed step-by-step process to the answer.