Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items, Joe Hanks, a recent finance graduate, has been hired by the companys finance department. One of the major revenue-producing items manufactured by the Conch Republic is the smartwatch. The Conch Republic currently has one smartwatch model on the market, and sales have been excellent. However, as with any electronic item, technology changes rapidly, and the current smartwatch has limited features in comparison with newer models from its competitors. The Conch Republic spent $550,000 to develop a prototype for a new generation smartwatch that has all the features of the existing smartwatch but adds new features such as ECG monitor, GPS tracking, and heart rate monitoring. The company has spent a further $250,000 for a marketing study to determine the expected sales figures for the new smartwatch. The Conch Republic can manufacture the new smartwatch for $125 each in variable costs. Fixed costs for the operation are estimated to run $3.5 million per year. The estimated sales volume is 75,000, 95,000, 125,000, 115,000, and 80,000 per each year for the next five years, respectively. The unit price of the new smartwatch will be $280 for the first three years, and it will drop to $230 in year 4 and year 5. The necessary equipment can be purchased for $15 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $3.5 million. As previously stated, the Conch Republic currently manufactures a smartwatch. Production of the existing model is expected to be terminated in two years. If the Conch Republic does not introduce the new smartwatch, sales will be 90,000 units and 60,000 units for the next two years, respectively. The price of the existing smartwatch is $280 per unit, with variable costs of $120 each and fixed costs of $1,800,000 per year. If the Conch Republic does introduce the new smartwatch, sales of the existing smartwatch will fall by 20,000 units in year1 and 25,000 in year 2, and the price of the existing units will have to be lowered to $200 each. Net working capital (NWC) for the smartwatch will be 28% of sales and will occur with the timing of the cash flows for the year; for Fin 4823 Financial Policy and Strategy 2 example, there is no initial outlay for NWC, but changes in NWC will first happen in year 1 with the first years sales. The Conch Republic has a 20% corporate tax rate and a 15% required return. Shelly has asked Joe to prepare a report by using EXCEL to evaluate this new project and answers the following questions:

9. What is the payback period for the project?

10. What is the profitability index of the project?

11. What is the IRR of the project?

12. What is the NPV of the project?

A excel must be completed