**Please show work in Excel (work and cell formulas)** Thank you.

onch Republic Electronics is a midsized electronics company has spent a further $250,000 for a marketing manufacturer located in Key West, Florida. The com- study to determine the expected sales figures for the pany president is Shelly Couts, who inherited the com- new smartphone. pany. The company originally repaired radios and other Conch Republic can manufacture the new smarthousehold appliances when it was founded more than phone for $210 each in variable costs. Fixed costs for 70 years ago. Over the years, the company has the operation are estimated to run $5.4 million per year. expanded, and it is now a reputable manufacturer of var- The estimated sales volumes are 67,000,108,000, ious specialty electronic items. Jay McCanless, a recent Mous specialty electronic items. Jay McCanless, a recent 93,000,86,000, and 55,000 per year for each of the MBA graduate, has been hired by the company in its next five years, respectively. The unit price of the new finance department. One of the major revenue-producing items manu- smartphone will be $525. The necessary equipment can factured by Conch Republic is a smartphone. Conch purchased for $41.5 million and will be depreciated Republic currently has one smartphone model on the on a seven-year MACRS schedule. It is believed the market, and sales have been excellent. The smartphone value of the equipment in five years will be $5.9 million. is a unique item in that it comes in a variety of tropical Net working capital for the smartphones will be 20 colors and is preprogrammed to play Jimmy Buffett percent of sales and will occur with the timing of the music. However, as with any electronic item, technology cash flows for the year (i.e., there is no initial outlay for changes rapidly, and the current smartphone has limited NWC). Changes in NWC thus will occur first in Year 1 features in comparison with newer models. Conch with the first year's sales. Conch Republic has a 22 perRepublic spent $1.5 million to develop a prototype for a percent. new smartphone that has all the features of the existing Shelly has asked Jay to prepare a report that one but adds new features such as Wi-Fi tethering. The answers the following questions: QUESTIONS 1. What is the payback period of the project? 2. What is the profitability index of the project? 6. How sensitive is the NPV to changes in the quantity sold? 3. What is the IRR of the project? 4. What is the NPV of the project? 7. Should Conch Republic produce the new smartphone? 5. How sensitive is the NPV to changes in the price of the new smartphone? 8. Suppose Conch Republic loses sales on other models because of the introduction of the new model. How would this affect your analysis