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?
How sensitive is the NPV to changes in the quantity sold?