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Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy materials and then download it into

  1. Comprehensive risk analysis) Blinkeria 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.

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%

Use Scenario Analysis to evaluate the Projects NPV (Use Spreadsheet) under different scenarios (Base, Worst and Best)

Base Case Worst Case Best Case
Unit Sales 100,000 80,000 125,000
Sale Price per Unit $100.00 $75.00 $115.00
Variable Cost per Unit $27.5 $37.5 $21.5
Cash Fixed Costs per Year $1,259,000 $1,375,000 $$875,000
Depreciation Expense MACRS MACRS MACRS
Salvage Value of Machine $600,000 $450,000 $750,000

Can you help me to do in excel but with the formulas and be clear with your answers. Tahnks

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