Webmasters.com has developed a powerful new server that would be used for corporations' Internet activities. It would cost $$11$ million at Year $0$ to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to $13\%$ of the year's projected sales; for example, NWC$0=13\%($Sales$1).$ The servers would sell for $$27,500$ per unit, and Webmasters believes that variable costs would amount to $$20,000$ per unit. After Year $1,$ the sales price and variable costs will increase at the inflation rate of $4\%.$ The company's nonvariable costs would be $$1$ million at Year $1$ and would increase with inflation.

The server project would have a life of $4$ years. If the project is undertaken, it must be continued for the entire $4$ years. Also, the project's returns are expected to be highly correlated with returns on the firm's other assets. The firm believes it could sell $900$ units per year.

The equipment would be depreciated over a $5-$year period, using MACRS rates. The estimated market value of the equipment at the end of the project's $4-$year life is $$700,000.$ Webmasters.com's federal$-$plus$-$state tax rate is $25\%.$ Its cost of capital is $12\%$ for average$-$risk projects, defined as projects with a coefficient of variation of NPV between $0\mathrm{.}8$ and $1\mathrm{.}2.$ Low$-$risk projects are evaluated with a $9\%$ project cost of capital and high$-$risk projects at $14\%.$

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations.

Develop a spreadsheet model, and use it to find the project's NPV$,$ IRR, and payback. Round your answer for the NPV to the nearest dollar and for the IRR and payback to two decimal places.

NPV$$$fill in the blank $2$IRRfill in the blank $3\%$Regular payback periodfill in the blank $4$years

Now conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and number of units sold. Set these variables' values at $10\%$ and $20\%$ above and below their base$-$case values. Round your answers to the nearest dollar. Use a minus sign to enter a negative value, if any.

$\%$ Deviation fromNPV with Variables at Different Deviations from BaseBase CaseSales PriceVariable Cost per UnitNumber of Units Sold$-20\%$$$$fill in the blank $5$$$$fill in the blank $6$$$$fill in the blank $7-10\%$$$$fill in the blank $8$$$$fill in the blank $9$$$$fill in the blank $100\%$$$$fill in the blank $11$$$$fill in the blank $12$$$$fill in the blank $1310\%$$$$fill in the blank $14$$$$fill in the blank $15$$$$fill in the blank $1620\%$$$$fill in the blank $17$$$$fill in the blank $18$$$$fill in the blank $19$