Question: PLEASE SOLVE USING EXCEL AND SHOW YOUR FORMULAS! WILL UPVOTE FOR DETAILED, CLEAR ANSWERS! 16. Emperor's Clothes Fashions can invest $5.38 million in a new
PLEASE SOLVE USING EXCEL AND SHOW YOUR FORMULAS! WILL UPVOTE FOR DETAILED, CLEAR ANSWERS!

16. Emperor's Clothes Fashions can invest $5.38 million in a new plant for producing invisible makeup. The plant has an expected life of five years, and expected sales are 6.38 million jars of makeup a year. Fixed costs are $2.95 million a year, and variable costs are $1.95 per jar. The product will be priced at $2.95 per jar. The plant will be depreciated straight-line over five years to a salvage value of zero. The opportunity cost of capital is 10%, and the tax rate is 40%. a) What is project NPV under these base-case assumptions? b) What is NPV if variable costs turn out to be $2.15 per jar? c) What is NPV if fixed costs turn out to be $2.45 million per year? d) At what price per jar would project NPV equal zero
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