Question: please answer all questions since it is a multi-level question as per chegg policy. Save Homework: Chapter 13 Homework : 0 X P13-7 (similar to)

please answer all questions since it is a multi-level question as per chegg policy.please answer all questions since it is a multi-level question as per

Save Homework: Chapter 13 Homework : 0 X P13-7 (similar to) Score: 0 of 6 pts 1 of 2 (2 completa) HW Score: 33.33%, 3 of 9 pts Question Help 0 (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $97 each, and the company analysts performing the analysis expect that the firm can sell 105,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,090,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.5 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $304.000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: E a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to an) 8 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a[n) 8 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to an) 8 percent increase in the variable cost per unit. e. Determine the sensitivity of the project's NPV to arn) 8 percent increase in the annual fixed operating costs f. Use scenario analysis to evaluate the project's NPV under worst- and best-case scenarios for the project's value drivers. The values for the expected or base-case along with the worst- and best-case scenarios are listed here: B . a. The NPV for the base-case will be $ . (Round to the nearest dollar.) ) Data Table Initial cost of the machine S10,500,000 Expected life 5 years Salvage value of the machine SO Working capital requirement S304,000 Depreciation method straight line Depreciation expense $2,100,000 per year Cash fixed costs-excluding depreciation $1,090,000 per year Variable costs per unit S20 Required rate of return or cost of capital 9.7% Tax rate 34% (Click on the icon in order to copy its contents into a spreadsheet.) Enter your answer in the answer box and then click Check Answer. 6 parts Print Done Check Answer remaining

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!