The Rustic Welt Company is proposing to replace its old welt$-$making machinery with more modern equipment. The new equipment costs $$9$ million $($the existing equipment has zero salvage value$).$ The attraction of the new machinery is that it is expected to cut manufacturing costs from their current level of $$8$ a welt to $$4.$ However, as the following table shows, there is some uncertainty both about future sales and about the performance of the new machinery:

Pessimistic Expected Optimistic

Sales $($millions of welts$)0\mathrm{.}40\mathrm{.}50\mathrm{.}7$

Manufacturing cost with new machinery $($dollars per welt$)643$

Economic life of new machinery $($years$)71013$

Conduct a sensitivity analysis of the replacement decision, assuming a discount rate of $12\%$ and enter the Equivalent Annual Cost Savings in the table below. Rustic Welt does not pay taxes.

Note: Do not round intermediate calculations. Enter your answers in millions rounded to $2$ decimal places. Negative amounts should be indicated with a minus sign.

Emperor's Clothes Fashions can invest $$5$ million in a new plant for producing

invisible makeup. The plant has an expected life of five years, and expected

sales are $6$ million jars of makeup a year. Fixed costs are $$2$ million a year, and

variable costs are $$1$ per jar. The product will be priced at $$2$ 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?

Note: Do not round intermediate calculations. Enter your answer in

thousands not in millions and round your answer to the nearest whole

dollar amount.

b$.$ What is NPV if variable costs turn out to be $$1\mathrm{.}20$ per jar?

Note: Do not round intermediate calculations. Enter your answer in

thousands not in millions and round your answer to the nearest whole

dollar amount.

c$.$ What is NPV if fixed costs turn out to be $$1\mathrm{.}5$ million per year?

Note: Do not round intermediate calculations. Enter your answer in

thousands not in millions and round your answer to the nearest whole

dollar amount.

d$.$ At what price per jar would project NPV equal zero?

Note: Do not round intermediate calculations. Round your answer to $2$

decimal places.