The expected annual free cash flow for the GPS tracker investment from is computed as follows:

Construct a spreadsheet model to compute free cash flow that relies on the following assumptions or estimates:

b. What level of annual unit sales does it take for the investment to achieve a zero NPV? Use your spreadsheet model to answer this question. (Hint: Use the Goal Seek function in Excel.)
c. If unit sales were 15% higher than the base case, what unit price would it take for the investment to achieve a zero NPV?

Revenues Variable cost Fixed expenses Gross profit Depreciation Net operating income Income tax expense NOPAT Plus depreciation Less CAPEX Less working capital investment Free cash flow $1.250,000 750,000 250,000 250,000 00,000 S 150,000 51,000 $ 99.000 00,000 $ 199,000 Values Base Case Estimates Initial cost of equipment Project and equipment life Salvage value of equipment Working capital requirement Depreciation method Depreciation expese Discount rate Tax rate Unit sales Price per unit Varia ble cost per unit Fixed costs $1,000,000.o 10 years so So Straight-line 100,000.00 10 00% 34.00% 10,000 $12500 $75.00 250,000.00