- REV-Sport and REV-Touring Whatever vehicle is chosen will be produced for the next four years, after which time a reevaluation will be necessary. The REV-Sport is ready for the final design and manufacturing phases. Final development costs are estimated to be $70 million and the new fixed costs for retooling are estimated to be $550 million. The REV-Sport is expected to sell for $40,000. The first-year sales for the REV-Sport is estimated to be 60,000, with a sales growth for the subsequent years of 5% per year. The variable cost per vehicle is uncertain until the design and supply-chain decisions are finalized, but is estimated to be $33,000. Next-year sale for the REV-Touring are estimated to be 50,000, but the sales are expected to decrease at a rate of 10% for each of the next three years. The selling price is $37,000. Variable costs per vehicle are $32,000. Since the model has been in production, the fixed costs for development have already been recovered. Print Done An electric vehide company is debating whether to replace its original model, the REV.Touring, with a new model, the REV-Sport. Using the accompanying information develop a four-year model to predict the profitability of each vehide and recommend the best decision using a not present value discount rate of 6%. How sensitive is the result to the estimated variable cost of the REV-Sport? How might this affect the decision? Click the foon to view the REV-Sport and REV-Touring information Create a model for the REV-Sport y (Type whole numbers) B C D E 1 REV-Sport 2 Selling Price $ 3 First-Year Sales 4 Variable Cost $ 5 Final Dev Cost $ 6 Retooling Cout $ 7 8 Year 1 Year 2 Year 3 Year 4 9 Annual Sales 10 Revenue 11 Total Variable Cost 7 y 12 Net Profil y 13 14Net Present Value -NPWE)-B5-B Perform the calculations from the spreadshoot that was created in the previous stop and then convert your answer into milions of dollars The net prosent value for REV-Sport is million (Round to the nearest milion dollars as needed) Extend the same spreadshoot to create a model for the REV-Touring Type whole numbers H J 1 REV Touring Selling Price 5 3 Next Year Sales 4 Variable Cost $ Final Day Cost $ Rotooling Cost $ Year 1 Year 2 Year 3 Year 4 9 Annual Sales 10 Revenue 11 Total Variable Cost 12 Net Profil 13 14 Not Present Value - NPV KL) 8 7 Y Y Perform the calculations from the spreadshot that was created in the previous stop and then convert your answer into milions of dollars The not present value for REV-Touring is milion (Round to the nearest million dollars noded) Using a not present valuescount of the best decision is to produce the y because Y not present at the variable cost of the REV Sport was increased by a small amount, say $1.000 per vehicle, the best son is to produce the becault has a ne rest value. This indicates that it Derinky to pouco the REV Sport because it mal change in the variable cost Time Remaining: 00.21 21 Next