Perform a sensitivity analysis on the unit sales, salvage value, and WACC for the project. Assume that each of these variables deviates from its base$-$case, or expected value by plus or minus $10\%,20\%,$ and $30\%.$ Calculate NPV for each case $(21$ NPV in total: $7$ NPV for change in unit sale; $7$ NPV for change in salvage value; and $7$ NPV for change in WACC$),$ then draw a graph with three lines $($one for Unit Sales, one for Salvage Value, and one for WACC, all three lines in the same graph $.$ At the end, perform a sensitivity analysis for the project $($what you have seen from your graph, what conclusion you can make?$).$

Years

$01234$

I. Investment Outlays

Equipment cost $ $450,000$

Shipping and Installation $38,000$

CAPEX $ $488,000$

Increase in inventory $ $40,000$

Increase in Accounts Payable $10,000$

$\backslash$Delta NOWC $ $30,000$

II$.$ Project Operating Cash Flows

Unit sales $195,000195,000195,000195,000$

Price per unit $$1\mathrm{.}60$ $$1\mathrm{.}60$ $$1\mathrm{.}60$ $$1\mathrm{.}60$

Total revenues $ $312,000$ $ $312,000$ $ $312,000$ $$312,000$

Operating costs $($w$/$o deprn$)124,800124,800124,800124,800$

Depreciation $195,200146,40097,60048,800$

Total costs $$320,000$ $$271,200$ $ $222,400$ $ $173,600$

EBIT $($Operating income$)$ $ $(8,000)$ $ $40,800$ $ $89,600$ $ $138,400$

Taxes on operating income $(1,840)9,38420,60831,832$

EBIT $(1$ T$)=$ After Tax operating income $ $(6,160)$ $ $31,416$ $$68,992$ $ $106,568$

Add back depreciation $195,200146,40097,60048,800$

EBIT $(1$ T$)+$ DEP $$0$ $$189,040$ $ $177,816$ $ $166,592$ $$155,368$

III. Project Termination Cash Flows

Salvage value $$45,000$

Tax on salvage value $(10,350)$

After$-$tax salvage value $34,650$

$\backslash$Delta NOWC $=$ Recovery of NOWC $$30,000$

Project Free Cash Flows $=($$$518,000)$ $ $189,040$ $ $177,816$ $ $166,592$ $$220,018$

EBIT$(1-$T$)+$ DEP $-$ CAPEX $-\backslash$Delta NOWC $ $(328,960)$ $ $(151,144)$ $ $15,488$ $ $235,466$

NPV $=50,941\mathrm{.}85$

IRR $=16\mathrm{.}508\%$

MIRR $=14\mathrm{.}66\%$

Payback $=2\mathrm{.}907$ Years