Nokia Inc. has one smart phone model on the market, and sales have been excellent. The product is a unique item in the market that it comes in a variety of tropical colors. However, the technology changes rapidly, and the current smart phone has limited features in comparison with newer models. The company is planning for a new smartphone, which will include all the existing features and WiFi tethering in addition.

Nokia Inc. can manufacture the new smart phones for $365 each in variable costs. Fixed costs for the operation are estimated to run $6.9 million per year. The estimated sales volume is 180,000;

190,000; 150,000; 125,000; and 100,000 per year for the next five years, respectively. The unit price of the new smart phone will be $625. The necessary equipment can be purchased for $60.0 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $6.8 million.

The effective tax rate for the company is 35%. The project requires no initial NWC investment, and it requires NWC balance equal to 15% of sales with the timing of the cash flows for the year.

For example, there is no initial outlay for NWC, but changes in NWC will first occur in Yearl with the first year's sales. The required return for the project is 20%.

Prepare a report in the given excel sheet that answers the following questions.

1. What is the payback period (PBP) of the project? Based on your analysis of PBP, should the company accept the smart phone project if the required payback period is 3 years? Use "if formula to construct "Accept" or "Reject" decision. (10 points)
2. What is the IRR of the project? Based on your analysis of IRR, should the company accept the project? Use "if formula to construct "Accept" or "Reject" decision. (10 points)
3. What is the NPV of the project? Based on your analysis of NPV, should the company accept the project? Use "if" formula to construct "Accept" or "Reject" decision. (10 points)

4. What is the Profitability Index (PI) of the project? Based on your analysis of PI, should the company accept the project? Use "if" formula to construct "Accept" or "Reject" decision. (5 points)

5.At what price would Nokia Inc. be indifferent to accepting the project? Use "if" formula to construct "Accept" or "Reject" decision. (10 points)

6.Draw the NPV profile for the Project. (10 points)

WILL UPVOTE ANSWER USING THE EXCEL FORMATS BELOW THANK YOU!

13 Net Working Capital 14 Year 15 NWC 16 Changes in NWC 17 Recovery of NWC at the very last year 18 Salvage Value Salvage Value Market value of salvage \begin{tabular}{llllll} Year 0 & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 \\ \hline \end{tabular} 21 Market value of salvage 22 Taxes on sale: Tax =( Market value of salvage book value of salvage)"tax 23 Aftertax salvage value: 25 Project Cash Flows 31 Total cash flow 32. Cumulative cash flow (this is needed to calculate the payback period. You can skip it if you want) 34 Ouestion 1 \begin{tabular}{ll|l|} \hline 35 & Payback Period & \\ \hline 36 & Decision? & \\ \hline 37 & \\ 38 & Ouestion2 & \\ \hline 39 & NPV & \\ \hline 40 & Decision? & \\ \hline \end{tabular} 42 Question 3 Question 5 51 Indiffirent Sales Price \begin{tabular}{|l|c|c|} \hline 52 & \multicolumn{2}{|l|}{} \\ \hline 53 & Ouestion 6 & NPV \\ \hline 54 & R & \\ \hline 55 & 0.00% & \\ \hline 56 & 5.00% & \\ \hline 57 & 10.00% & \\ \hline 58 & 15.00% & \\ \hline 60 & 20.00% & \\ \hline 61 & 25.00% & \\ \hline 62 & 30.00% & \\ \hline 63 & 35.00% & \\ \hline 64 & 40.00% & \\ \hline 65 & 45.00% & \\ \hline \end{tabular}