InvigorCorporation is an international manufacturer of fragrances for women. Management at

Invigoris considering expanding the product line to men's fragrances.

From the best estimates of the marketing and production managers ,annual sales(all for cash)for this new line are 800,000units at $100 per unit; cash variable cost is $50 per unit and cash fixed costs are

$7,000,000per year. The investment project requires $40,000,000of cash outflow and has a project life of 6years. At the end of the6-yearuseful life,there will be no terminal disposal value. Assume all cash flows occur at year-endexcept for initial investment amounts. Men'sfragrance is a new market for

Invigor,and management is concerned about the reliability of the estimates. The controller has proposed applying sensitivity analysis to selected factors. Ignore income taxes in your computations.

Invigor'srequired rate of return on this project is 10 %.

Requirement 1. Calculate the net present value of this investment proposal.

Begin by determining the formula needed to calculate the annual net cash inflow from the investment proposal