(Comprehensive risk analysis) Blinhria is considering introducing a new line of hand scanners that can be used to copy materials and then download it into a personal computer These scanners are expected to sell for an average price of $100 each, and the company analysts performing the analysis expect that the Firm can sell 100,000 units per year at this price for a period of seven 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 $27 5 per unit while cash fixed costs, not including depreciation, are forecast to be $1,259,000 per year To manufacture this product, Blinkeria will need to buy a computerized production machine for $9 75 million that has residual value of $600,000 and will have an expected life of seven years In addition, the firm expects it will have to invest an additional $300,000 in working capital to support the new business Other pertinent information conceming the business venture is provided in the attached file Initial Cost of Machine $9,750,000 Expected Life 7 Years Salvage Value of Machine $600,000 Working Capital Requirements $300,000 Depreciation Method MACRS 5 Cash Fixed Costs Excluding Depreciation $1,259,000 Required Rate of Return 9 45 Variable Cost of Production per Unit $27 5 Tax Rate 33 Calculate the NPV of the Project On a Spreadsheet Determine the sensitivity of the project's NPV to a 10 decrease in the number of units sold Determine the sensitivity of the project's NPV to a 10 percent decrease in the variable cost per unit Determine the sensitivity of the project's NPV to a 10 percent increase in the variable cost per unit Determine the sensitivity of the project' s NPV to a 10 percent increase in the annual fixed operating costs Determine the sensitivity of the project' s NPV to a 10 increase in the annual fixed operating costs, 10 increase in unit variable costs and 10 increase in units sold Report your calculations in a table, with each scenario above as a column (A, B, C, D, E, F)

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(Comprehensive risk analysis) Blinhria is considering introducing a new line of hand scanners that can be used to copy materials and then download it into a personal computer. These scanners are expected to sell for an average price of $100 each, and the company analysts performing the analysis expect that the Firm can sell 100,000 units per year at this price for a period of seven 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 $27.5 per unit while cash fixed costs, not including depreciation, are forecast to be $1,259,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $9.75 million that has residual value of $600,000 and will have an expected life of seven years. In addition, the firm expects it will have to invest an additional $300,000 in working capital to support the new business. Other pertinent information conceming the business venture is provided in the attached file:

Initial Cost of Machine	$9,750,000
Expected Life	7 Years
Salvage Value of Machine	$600,000
Working Capital Requirements	$300,000
Depreciation Method	MACRS 5
Cash Fixed Costs Excluding Depreciation	$1,259,000
Required Rate of Return	9.45%
Variable Cost of Production per Unit	$27.5
Tax Rate	33%

Calculate the NPV of the Project On a Spreadsheet
Determine the sensitivity of the project's NPV to a 10 % decrease in the number of units sold.
Determine the sensitivity of the project's NPV to a 10 percent decrease in the variable cost per unit
Determine the sensitivity of the project's NPV to a 10 percent increase in the variable cost per unit.
Determine the sensitivity of the project' s NPV to a 10 percent increase in the annual fixed operating costs.
Determine the sensitivity of the project' s NPV to a 10 % increase in the annual fixed operating costs, 10% increase in unit variable costs and 10% increase in units sold
Report your calculations in a table, with each scenario above as a column (A, B, C, D, E, F)