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 $ Pretax salvage va $ R&D Marketing study $ 32,500,000 3,500,000 750,000 200,000 Year 3 108,000 Year 4 94,000 Year 5 57,000 Sales (units) Sales of old PDA Lost sales Depreciation rate Year 1 65,000 80,000 15,000 14.29% Year 2 82,000 60,000 15,000 24.49% 17.49% 12.49% 8.93% Price VC FC Tax rate NWC percentage Required return 500 215 4,300,000 35% 20% 12% 26 Sales 27 VC 28 29 Fixed costs Dep EBT 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 $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 $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 $47,000,000 20,210,000 4,300,000 4,059,250 $18,430,750 6,450,763 $11,979,988 4,059,250 $15,039,238 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 Tax +Dep OCF 37 NWC Beg End NILAC rc $9,400,000 38 6,500,000 LCCAL AAN $6,500,000 8,200,000 1 01 700DAAL $8,200,000 10,800,000 ANAAL $10,800,000 9,400,000 1400 ANA CORA DA H29 x fx Sales Fixed costs Dep ET Tax 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 $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 $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 $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 $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 NV +Dep OCF $9,400,000 NWC Beg End NWC CF 6,500,000 ($6,500,000) $6,500,000 8,200,000 ($1,700,000) $8,200,000 10,800,000 ($2,600,000) $10,000,000 9,400,000 $1,400,000 $9,400,000 Net CF $4,371,73B $13,481,238 $16,601,488 $17,439,238 $18, 180,038 Salvage BV of equipment $ Taxes $ 7,250,750 1,312,763 46 47 Salvage CF $ 4,812,763 Time un WNO Cash flow (32,500,000) 4,371,738 13,481,238 16,601,488 17,439,238 22,992,800 57. What is the profitability index of the project? 58 What is the IRR of the project? What is the NPV of the project? 59 b. GO 61 c. 62 63 d. 64 65 c. 66 How sensitive is the NPV to changes in the price ofthe new PDA? How sensitive is the NPV to changes in the quantity sold? Master it! + 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 $ Pretax salvage va $ R&D Marketing study $ 32,500,000 3,500,000 750,000 200,000 Year 3 108,000 Year 4 94,000 Year 5 57,000 Sales (units) Sales of old PDA Lost sales Depreciation rate Year 1 65,000 80,000 15,000 14.29% Year 2 82,000 60,000 15,000 24.49% 17.49% 12.49% 8.93% Price VC FC Tax rate NWC percentage Required return 500 215 4,300,000 35% 20% 12% 26 Sales 27 VC 28 29 Fixed costs Dep EBT 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 $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 $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 $47,000,000 20,210,000 4,300,000 4,059,250 $18,430,750 6,450,763 $11,979,988 4,059,250 $15,039,238 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 Tax +Dep OCF 37 NWC Beg End NILAC rc $9,400,000 38 6,500,000 LCCAL AAN $6,500,000 8,200,000 1 01 700DAAL $8,200,000 10,800,000 ANAAL $10,800,000 9,400,000 1400 ANA CORA DA H29 x fx Sales Fixed costs Dep ET Tax 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 $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 $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 $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 $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 NV +Dep OCF $9,400,000 NWC Beg End NWC CF 6,500,000 ($6,500,000) $6,500,000 8,200,000 ($1,700,000) $8,200,000 10,800,000 ($2,600,000) $10,000,000 9,400,000 $1,400,000 $9,400,000 Net CF $4,371,73B $13,481,238 $16,601,488 $17,439,238 $18, 180,038 Salvage BV of equipment $ Taxes $ 7,250,750 1,312,763 46 47 Salvage CF $ 4,812,763 Time un WNO Cash flow (32,500,000) 4,371,738 13,481,238 16,601,488 17,439,238 22,992,800 57. What is the profitability index of the project? 58 What is the IRR of the project? What is the NPV of the project? 59 b. GO 61 c. 62 63 d. 64 65 c. 66 How sensitive is the NPV to changes in the price ofthe new PDA? How sensitive is the NPV to changes in the quantity sold? Master it! +