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Based on the inputs below prepare a capital budget analysis for this Base Case using the Net Present Value. Internal Rate of Return, Profitability Index

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Based on the inputs below prepare a capital budget analysis for this Base Case using the Net Present Value. Internal Rate of Return, Profitability Index and Payback in Years determining whether the project is feasible. Please show your spreadsheet calculations and your final determinations of "go" or "no go" on the project. Project Inputs: WACC - the cost of capital (hurdle rate) will be the current yield of the 10 Year U.S. Treasury Note as of Tuesday July 5, 2016, plus 700 basis points. Project Investment Outlay. Year 0 - $400,000 Project Investment Life - 10 years Project Depreciation -S40.000/year Project Salvage Value - $10,000 Working Capital Base of Annual Sales 10% Expected inflation rate per year. Selling Price Per Unit 5% Expected inflation rate per year. Manufacturing Cost per unit -3.5% Expected inflation rate per year, fixed operating costs per year - 2.5% Project Tax Rate -30% Inputs continued: Units sold per year 50,000 Selling Price per Unit, Year 1 - $35 Fixed operating costs per year excluding depreciation - $150,000 Manufacturing costs per unit, Year 1 -$25.20 Using Case #2 as your Base Case prepare the following Risk Analysis from the topics in Chapter 11 and exampled in the Week #5 Course Content Review Problems File Folder: "Week 5 Risk Analysis Review" Excel spreadsheet. Scenario Analysis: Base Case Scenario -50,000 units sold per year -57% probability Worst Case Scenario -25,000 units sold per year -25% probability Best Case Scenario 75,000 units solder per year - 18% probability Prepare a scenario analysis and explain if this review indicates any change in your "Go" or "No Go" original recommendation. Sensitivity Analysis: In addition to the above, also prepare a sensitivity analysis based on the following variables -Deviation from the Base: -30%, -15%. 0%, -15%, -30% Sensitivity Variables: Selling Price per Unit, Manufacturing Cost per Unit, WACC, Please show the range in the NPVs for each variable and chart the analysis. Which variable has the highest risk and which variable has the lowest risk? Explain

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