Question: I Need Answer in Excel You are considering a start of a new product line. Project cost $800,000 Project life 4 year Depreciation straight-line to

I Need Answer in Excel

You are considering a start of a new product line.

Project cost $800,000

Project life 4 year

Depreciation straight-line to zero

Feasibility study $10,000

Sales units $450 units per Year

Price per unit $18,000

Variable cost per unit $15,400

Fixed costs $610,000 per year

The required return on the project is 10 percent, and the relevant tax rate is 35 percent.

c. Use Excel data table to perform a sensitivity analysis to change in fixed cost.

d. Using Excel, what will be the new base case NPV if equipment will be sold at the end of project for $500,000 and that there will be an initial investment in net working capital of $50,000 which will be recovered at the end of the project.

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