Please Explain and Show the Formulas

- Open a blank Excel workbook (i.e., do not use class exercise template) to perform your calculations. As I said in class, keep a data-entry section and calculation cells separated. - Click "Homework Assignments Ch _" and upload your completed Excel file. No submission will be accepted beyond the deadline. - Your Excel file needs to be named to reflect your name and the assignment number. For example, I may name my file for Assignment \#1 "nishi_hiro_A1." - Format your answers to two decimal places. In each question, highlight the cell of the you answer in yellow (e.g., $812.51,12.35% ). - Solutions will not be presented during the semester. Instead, we will go over some of the key problems in the exam review session(s). Pastoral Healthcare Inc. is considering the following project. Assume that the corporate tax rate is 21% and the firm's discount rate is 10%. - Duration: 5 years - Initial investment: \$3 million - Number of units: 5,000 (per year) - Price per unit: $500.00 - Variable cost per unit: \$265.00 - Annual fixed costs: $250,000 a) What is the annual operating cash flow (OCF) of the project? Use straight line depreciation method for the depreciation calculation. ( 2 points) b) What is the net present value (NPV) of the project? ( 2 points) c) What is the sensitivity to the change in the variable cost per unit in the NPV? Be sure that the sign (positiveegative) of your answer is correct. ( 3 points)