Perot Corporation is developing a new CPU chip based on a new type of technology. Its new chip, the Patay$2$ chip, will take two years to develop. However, because other chip manufacturers will be able to copy the technology, it will have a market life of two years after it is introduced. Perot expects to be able to price the chip higher in the first year, and it anticipates a significant production cost reduction after the first year. The relevant information for developing and selling the Patay$2$ is given as follows:

PATAY$2$ CHIP PRODUCT ESTIMATES

Development cost $$23,200,000$

Pilot testing $$5,800,000$

Debug $$3,480,000$

Ramp$-$up cost $$3,480,000$

Advance marketing $$5,800,000$

Marketing and support cost $$1,160,000$ per year

Unit production cost year $1$ $$655\mathrm{.}00$

Unit production cost year $2$ $$545\mathrm{.}00$

Unit price year $1$ $$820\mathrm{.}00$

Unit price year $2$ $$650\mathrm{.}00$

Sales and production volume year $1266,000$

Sales and production volume year $2166,000$

Interest rate $10\%$

A Gant chart titled Patay $2$ chip project timing. The project schedule is $4$ years which is divided into $2$ halves each for Patay $2$ chip. The data in the chart are as follows. Development: year $1$ and year $2.$ Pilot testing: year $2.$ Debug: year $2.$ Ramp$-$up: second half of year $2.$ Advance marketing: second half of year $2.$ Marketing and support: year $3$ and year $4.$ Production and sales: year $3$ and year $4.$

Assume all cash flows occur at the end of each period.

What are the yearly cash flows and their present value $($discounted at $10$ percent$)$ of this project? What is the net present value?

Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign.

Perot$$s engineers have determined that spending $$10$ million more on development will allow them to add even more advanced features. Having a more advanced chip will allow them to price the chip $$50$ higher in both years $($$$870$ for year $1$ and $$700$ for year $2).$ What is the NPV of the project if this option is implemented?

Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign.

If sales are only $232,000$ the first year and $116,000$ the second year, what would the NPV of the project be$?$ Assume the development costs and sales price are as originally estimated.

Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign.