It is now May $1,2031$ and Hudsle Motors is preparing to introduce a new car. The following information is relevant and some inputs are provided in hudsle data.xlsx Download hudsle data.xlsx$.$

The fixed cost of developing the new car is incurred on January $1,2032$ and is assumed to be $$750$ million. It is depreciated on a straight$-$line basis during the years $2032$ to $2036.$

The tax rate is $40\%,$ but no taxes are paid when before tax profit is negative.

The car will come to market in $2032$ and sell for $12$ years at a unit price of $$25,000.$

The market size during $2032$ will be $80,000$ cars and Hudsle$$s market share will be $15\%.$ After $2032,$ the market size is expected to grow by $4\%$ per year.

A design improvement is envisioned for the year $2037$ that they believe will make their market share in that year will be $1\mathrm{.}25$ times what it had been previously. The R&D cost of $$85$ million for this design improvement will be incurred fully at the end of prior year. The market share will stay at that new level.

The cost of producing the first x cars is $15,000$x$99$ dollars. This builds a learning curve into the cost structure. $($e$.$g$.$ If they make $125$ cars in year $1,$ it costs a total of $15000*1250\mathrm{.}99=$ $$1,786,620$ for those first $125$ cars. If they make $100$ cars in year $2,$ then they have made a total of $225$ but the year $2$ production cost is $15000*2250\mathrm{.}99-15000*1250\mathrm{.}99.)$

Unless otherwise stated, cash flows are assumed to occur at the end of the year.

Hudsel discounts its cash flows at $7\%$ per year.

a$)$ Develop a spreadsheet model that ultimately determines the NPV on Jan. $1,2032$ of the cash flows generated by this car. $(20$ points$)$

b$)$ Hudsle is concerned whether $$25,000$ is the right price. What is the lowest price they should consider for the car? $(5\mathrm{.}33$ points$)$

c$)$ Going back to the original price, use a data table to show how the NPV changes if the design improvement envisioned for the year $2037$ actually happens in $2038,2039,...,$ or $2043.$ Determine the financial consequence of each year of delay in the introduction of the design improvement. $(8$ points$)$