A software development company is thinking of updating a software product Currently 2,11,000 units of the product are sold at a price of Rs. 1900 each, The fixed cost of the update will be Rs, 804%00,000. Unit variable cost is Rs. 800 for both the old and new versions of the product

The updated product is expected to sell at Rs_ 3500 during the first year with a minimum of 1,00,.000 units sold. The number of units sold is expected to increase by 5% per year if the price remains unchanged_ However, the sales of the new version of the product will cat into the sales of the old version of the product (i.e.. if x units of the new version are sold in any year,. 211000

x units of the old version will be sold during that year).

if the sales of the updated product does not exceed 1,15,000 units in the first year, the company will cut its price to Rs_ 3000 during the second year thereby increasing units sold by 15%, and if it does riot recover the update fixed cost in the first two years, the company will reduce the price further to Rs_ 2500 during the third and subsequent years thereby increasing sales by 12% each year

Assume that the discount rate is 11%.

Show how the NPV of the (before tax) profits of the company during the first five years will change when the discount rate varies between 10% and 15% at 0.25 percentage point intervals and first year sales of the new version of the product varies between 1,00,000 and 1,60000 units at 5000 unit intervals simultaneously.