(B) Using the spreadsheet for the Base Case (number of snowmobiles sold per year is 100): i. What is the IRR of the business? ii. From the Base Case, how low can the number of snowmobile sales go to in order to have an NPV of zero? This is called the breakeven point. iii. You get good news from your team! Your marketing team forecasts that sales of the snowmobiles will be 120 per year which is better than in the Base Case. How much can you now afford to invest and still get a 10% return? 1 IN 3 3 4 5 Number of units sold per year: Unit sales price: Revenue: 100 100 100 100 100 $10,000 $10,000 $10,000 $10,000 $10,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 Variable cost per unit: Variable cost per year: $5,000 $500,000 $5,000 $5,000 $500,000 $500,000 $5,000 $500,000 $5,000 $500,000 Fixed Cost: $125,000 $125,000 $125,000 $125,000 $125,000 Total operating cost per year: $625,000 $625,000 $625,000 $625,000 $625,000 Annual Revenue - Operating cost: $375,000 $375,000 $375,000 $375,000 $375,000 Depreciation per year: Tax Savings (ED) per year: $200,000 $80,000 $200,000 $200,000 $80,000 $80,000 $200,000 $80,000 $200,000 $80,000 Cash flow per year: ($1,000,000) $305,000 $305,000 $305,000 $305,000 $305,000 Capital Investment: $1,000,000 Minimum Acceptable Rate of return: 10.0% NPV = $156,190