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ject Risk Assessment: Sensitivity Analysis ( 30 points) 1. Priyank Pharmaceuticals is looking into investing in a new processing and packaging line. Initial estimates show

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ject Risk Assessment: Sensitivity Analysis ( 30 points) 1. Priyank Pharmaceuticals is looking into investing in a new processing and packaging line. Initial estimates show that it would require an initial investment of $2.25 million dollars and will have a residual value of $150,000 after 7 years useful life. To support this new product expansion, the company will plan for an additional working capital of $650,000. The firm is forecasting that it can sell 17,500 units monthly at an average price of $16 per unit for the next seven years. Variable cost is $9 and the annual fixed overhead cost is anticipated to be $560,000 within the same time period. The firm's tax rate is 40% and the discount rate is 12%. Given the rapid inflation and market volatility, the company is asking you to calculate the project NPV and IRR for the base case scenario and the following value driver scenario changes below. Hint: You will need to provide 5 different cashflows and calculate the NPV and IRR for all 5 scenarios. (20 points) Provide a concise analysis of the different value driver scenarios and propose next steps for Priyank Pharmaceuticals' leadership team. (10 points)

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