Explain your reasoning thanks.

Conch Republic Electronics, Part 2 Shelley Coats, the owner of Conch Hepublic Flectrosies, has received the capital budgeting analysis from Jay McCanless for the new umartphone the company is considering. Sbelley is pleased with the resalts, but she still has concerns about the new smartphone. Conch Republic has usod a small market research firm for the past 20 years, but recently the founder of that firm has retired. Because of this. Shelley is not convinced the sales projections presented by the market research firm are entirely accurate. Additionally, because of rapid changes in technology, the is concertied that a competifor may enter the market. This would likely force Conch Republic to lower the nales peice of is new smartphone. For these reasons, the has asked Jay to analyze how changes in the price of the new smartplone and changes in the quantity sold will affect the NPV or the project. Shelley has asked Jay to prepare a memo anwwerine the following queutions. QUESTIONS 1. How sensitive is the NPV to changes in the price of the new smartphone? 2. How sensitive is the NPV to changes in the quantify sold of the new smartphone? Input Area: \begin{tabular}{l|r|} \hline Equipment & 49500000 \\ Salvage value & 6800000 \\ \hline R\&D & 950000 sunk cost \\ Marketing study & 250000 sunk cost \end{tabular} \begin{tabular}{l|r|r|r|r|r|} & & & & & \\ & Year 1 & Year 2 & Year 3 & Year 4 & \multicolumn{1}{l}{ Year 5 } \\ \hline Sales(units) & 160000 & 170000 & 130000 & 105000 & 80000 \\ \hline Depreciation rate & 0.1429 & 0.2449 & 0.1749 & 0.1249 & 0.0893 \\ \hline Sales of old PDA & 95000 & 65000 & & & \\ \hline Lost sales & 30000 & 30000 & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline Price & 575 \\ \hline VC & 245 \\ \hline FC & 6900000 \\ \hline Price of old 40 D & 385 \\ \hline Price reduction & \\ \hline of old PDA & 235 \\ \hline VC of old PDA & 155 \\ \hline Tax rate & 0.21 \\ \hline NWC percentage & 0.2 \\ \hline Required return & 12 \\ \hline \end{tabular} Sensivity analysis New price 540 Quantity change 100 NOTE: Change in units per year