FastTrack Bikes Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $199,000 per year. Once in production, the bike is expected to make $318,400 per year for 10 years. Assume the cost of capital is 10%. a. Calculate the NPV of this investment opportunity. Should the company make the investment? b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged (Hint: Use Excel to calculate the IRR.) c. Calculate the NPV of this investment opportunity assuming the cost of capital is 15%. Should the company make the investment given this new assumption? Note: Assume that all cash flows occur at the end of the appropriate year and that the the inflows do not start until year 7. a. Calculate the NPV of this investment opportunity. Should the company make the investment? The present value of the costs is $ 892,828". (Round to the nearest dollar.) The present value of the benefits is $ 1,066,548". (Round to the nearest dollar.) The net present value is $ 173,720. (Round to the nearest dollar.) (Select from the drop-down menus.) You should accept the investment because the NPV is positive b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. (Hint: Use Excel to calculate the IRR.) The IRR is 12.66 %. (Round to two decimal places.) The maximum deviation allowable in the cost of capital estimate to leave the decision unchanged 2.66%. (Round to two decimal places.) c. What is the NPV of the investment if the cost of capital is 15%? Should the company make the investment given this new assumption? The present value of the costs is $ 775,819. (Round to the nearest dollar.) The present value of the benefits is $ 667,199. (Round to the nearest dollar.)