Superfast Bikes is thinking of developing a new composite road bike. Development will take six years and the cost is $ $199$ comma $200$ per year. Once in$$ production, the bike is expected to make $ $294$ comma $127$ per year for $10$ years. The cash inflows begin at the end of year $7.$

Assuming the cost of capital is $9\mathrm{.}2\%$:

a$.$ Calculate the NPV of this investment opportunity. Should the company make the$$ investment?

b$.$ Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

c$.$ How long must development last to change the$$ decision?

Assume the cost of capital is $14\mathrm{.}1\%.$

d$.$ Calculate the NPV of this investment opportunity. Should the company make the$$ investment?

e$.$ How much must this cost of capital estimate deviate to change the$$ decision?

f$.$ How long must development last to change the$$ decision?