1. Emperors Clothes Fashions can invest $5 million in a new plant for producing invisible makeup. The plant has an expected life of five years, and expected sales are 6 million jars of makeup a year. Fixed costs are $2 million a year, and variable costs are $1 per jar. The product will be prices at $2 per jar. The plant will be depreciated straight-line over five years to a salvage value of zero. The opportunity cost of capital is 10% and the tax rate is 40%.
   1. Calculate the NPV of the investment under these assumptions
   2. Calculate the NPV if variable costs turn out to be $1.20 per jar
   3. What is the NPV if fixed costs turn out to be $1.5 million per year?
   4. Calculate the breakeven price per jar under the original assumptions
   5. Calculate the breakeven sales under the original assumptions