Part 2 (30 points): Netflix is partnering with HHC to produce a line of costumes from their popular show Squid Game. They will produce three versions of the popular tracksuit featured by the main characters for adults, youth, and children. HHC has forecast the demand and the cost to develop and produce these new costumes. Netflix has stipulated that the design of costumes will be updated each year to tie into new versions of the show as they are released. The project plan and all relevant forecast and cost inputs are provided here

Download here

.

2.1 Considering the initial investments made in Y1 and estimating an average cost per item at $5.7, with a unit price of $19.99, will HHC break even with the Squid Game line during its first year of sales?

2.2 What are this project's yearly cash flows and present value? What is the net present value?

2.3 What is the impact on NPV if the actual unit sales are 75% of the forecasted demand?