Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $104 each, and the company analysts performing the analysis expect that the firm can sell 108,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,010,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.9 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $302,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here:

Initial cost of the machine	$10,900,000
Expected life	5 years
Salvage value of the machine	$0
Working capital requirement	$302,000
Depreciation method	straight line
Depreciation expense	$2,180,000 per year
Cash fixed costslong dashexcluding depreciation	$1,010,000 per year
Variable costs per unit	$20
Required rate of return or cost of capital	9.2%
Tax rate	34%

a. Calculate the project's NPV.

b. Determine the sensitivity of the project's NPV to a(n) 9 percent decrease in the number of units sold.

c. Determine the sensitivity of the project's NPV to a(n) 9 percent decrease in the price per unit.

d. Determine the sensitivity of the project's NPV to a(n) 9 percent increase in the variable cost per unit.

e. Determine the sensitivity of the project's NPV to a(n) 9 percent increase in the annual fixed operating costs.