Part IV: Sensitivity Analysis Use this information to answer questions 26-30. BearKat Enterprises has a WACC of 7.1% BearKat Enterprises wants you to do a sensitivity analysis where you increase the mask price by 10% and decrease it by 10%. Also see what happens when you increase the variable costs by 10% and decrease them by 10%. QUESTION 28 Use the information from part IV to answer this. What is the NPV of the project if the variable cost to make the mask is decreased by 10%? A..$25,702.84 B. $32,123.44 C. $22.483.93 D.$15,660.29 QUESTION 29 Use the information from part IV to answer this. What is the NPV of the project if the variable cost to make the mask is increased by 10%? A $25,702.84 B. $32,123.44 $15,182.38 D. -$25,850.81 Part II: Capital Budgeting Use this information to answer questions 9-18 Intel is contemplating a new project where they will bring their computer chip manufacturing business back to the United States. They are estimating that they will invest $415,000 initially then will have positive cash flows over the next four years of: Year 1: $45,000 Year 2: $125.000 Year 3: $160,000 Year 4: $175.000 Regardless of your answer in the previous question use a WACC of 7.2%. (This is NOT the answer you should have gotten in part 1.) Part III: Cash Flow Estimation Use this information to answer questions 18-25 BearKat Enterprises is considering a project where they will make high end designer face masks. They can buy the equipment they need to make the face masks for $250,000 plus another $20,000 for training and installation. They will have to increase inventory by $17,000 and accounts payable will increase $3,000. They think they can sell 23,000 masks a year at a price of $6.50 each for 4 years. The estimate variable costs at 52% of revenue. They follow a four years MACRS schedule for depreciation with the following depreciation rates: Year 1: 33% Year 2: 45% Year 3: 15% Year 4: 7% They believe the equipment has a salvage value of $45.000. BearKat Enterprises has a tax rate of 21%. And a WACC of 7.1%. Once the project is done the additional inventory will not need to be purchased and the accounts payable balance will be paid. Part IV: Sensitivity Analysis Use this information to answer questions 26-30. BearKat Enterprises has a WACC of 7.1% BearKat Enterprises wants you to do a sensitivity analysis where you increase the mask price by 10% and decrease it by 10%. Also see what happens when you increase the variable costs by 10% and decrease them by 10%. Part V: Scenario Analysis Use this information to answer questions 31- 34. Suppose BearKat Enterprises management team decides to do a scenario analysis. They want you to calculate the expected NPV, standard deviation, and coefficient of variation for a new project. These are not the NPV's that you calculated earlier). They give you the following data: Best case has a 25% probability and has an NPV of $29 M. Base case has a 55% probability and has an NPV of $12M. Worst case has a 20% probability and has an NPV of -$35M