Question: For this Master It! assignment, refer to the Conch Republic Electronics case at the end of Chapter 9. For your convenience, we have entered the
For this Master It! assignment, refer to the Conch Republic Electronics case at the end of Chapter 9. For your convenience, we have entered the relevant values in the case such as the price, variable cost, etc. on the next page. For this project, answer the following questions: Equipment $32,500,000 Pretax salvage value $3,500,000 R&D $750,000 Marketing study $200,000 Year 1 Year 2 Year 3 Year 4 Year 5 Sales (units) 65,000 82,000 108,000 94,000 57,000 Sales of old PDA 80,000 60,000 Lost sales 15,000 15,000 Depreciation rate 14.29% 24.49% 17.49% 12.49% 8.93% Price $500 VC $215 FC $4,300,000 Tax rate 35% NWC percentage 20% Required return 12% Year 1 Year 2 Year 3 Year 4 Year 5 Sales $32,500,000 $41,000,000 $54,000,000 $47,000,000 $28,500,000 VC 13,975,000 17,630,000 23,220,000 20,210,000 12,255,000 Fixed costs 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 Dep 4,644,250 7,959,250 5,684,250 4,059,250 2,902,250 EBT $9,580,750 $11,110,750 $20,795,750 $18,430,750 $9,042,750 Tax 3,353,263 3,888,763 7,278,513 6,450,763 3,164,963 NI $6,227,488 $7,221,988 $13,517,238 $11,979,988 $5,877,788 +Dep 4,644,250 7,959,250 5,684,250 4,059,250 2,902,250 OCF $10,871,738 $15,181,238 $19,201,488 $16,039,238 $8,780,038 NWC Beg $0 $6,500,000 $8,200,000 $10,800,000 $9,400,000 End 6,500,000 8,200,000 10,800,000 9,400,000 0 NWC CF ($6,500,000) ($1,700,000) ($2,600,000) $1,400,000 $9,400,000 Net CF $4,371,738 $13,481,238 $16,601,488 $17,439,238 $18,180,038 Salvage BV of equipment $7,250,750 Taxes $1,312,763 Salvage CF $4,812,763 Time Cash flow 0 $(32,500,000) 1 4,371,738 2 13,481,238 3 16,601,488 4 17,439,238 5 22,992,800 What is the profitability index of the project? What is the IRR of the project? What is the NPV of the project? How sensitive is the NPV to changes in the price of the new PDA? Construct a one way data table to help you answer this question. How sensitive is the NPV to changes in the quantity sold?



Can anyone please help me with the assignment. I don't know how to answer and solve these questions because my teacher didn't provide me any of the formulas.
Equipment Pretax salvage val R&D Marketing study Sales (units) Sales of old PDA Lost sales Depreciation rate Price VC FC Tax rate NWC percentage Required return Sales VC Fixed costs Dep EBT Tax Dep OCF 32,500,000 3,500,000 750,000 00.000 Year 1 65,000 0.000 15,000 14.29% 500 215 4,300,000 35% 20% 12% Year 1 $32,500,000 13,975,000 4,300,000 4,644,250 $9,580,750 3,353,263 $6,227,488 4,644,250 $10,871,738 Year 2 82,000 0.000 15,000 24.49% Year 2 $41,000,000 17,630,000 4,300,000 7,959,250 $11,110,750 3,888,763 $7,221,988 7,959,250 $15,181,238 Year 3 108,000 17.49% Year 3 $54,000,000 23,220,000 4,300,000 5,684,250 $20,795,750 7,278,513 $13,517,238 5,684,250 $19,201,488 Year 4 94,000 12.49% Year 4 $47,000,000 20,210,000 4,300,000 4,059,250 $18,430,750 6,450,763 $11,979,988 4,059,250 $16,039,238 Year 5 57,000 8.93% Year 5 $28,500,000 12,255,000 4,300,000 2,902,250 $9,042,750 3,164,963 $5,877,788 2,902,250 $8,780,038 Equipment Pretax salvage val R&D Marketing study Sales (units) Sales of old PDA Lost sales Depreciation rate Price VC FC Tax rate NWC percentage Required return Sales VC Fixed costs Dep EBT Tax Dep OCF 32,500,000 3,500,000 750,000 00.000 Year 1 65,000 0.000 15,000 14.29% 500 215 4,300,000 35% 20% 12% Year 1 $32,500,000 13,975,000 4,300,000 4,644,250 $9,580,750 3,353,263 $6,227,488 4,644,250 $10,871,738 Year 2 82,000 0.000 15,000 24.49% Year 2 $41,000,000 17,630,000 4,300,000 7,959,250 $11,110,750 3,888,763 $7,221,988 7,959,250 $15,181,238 Year 3 108,000 17.49% Year 3 $54,000,000 23,220,000 4,300,000 5,684,250 $20,795,750 7,278,513 $13,517,238 5,684,250 $19,201,488 Year 4 94,000 12.49% Year 4 $47,000,000 20,210,000 4,300,000 4,059,250 $18,430,750 6,450,763 $11,979,988 4,059,250 $16,039,238 Year 5 57,000 8.93% Year 5 $28,500,000 12,255,000 4,300,000 2,902,250 $9,042,750 3,164,963 $5,877,788 2,902,250 $8,780,038
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