perform question within excel with formulas if needed please

1. What is the payback period of the project?

2. What is the IRR of the projecf?

3. What is the NPV of the project

4. How senstive is the NPV to changes in the orice of the new PDA? 10% decrease

5. How sensitive id the NPV to changes in the quanity sold? 10% decrease

6. Should Conch Republic produce the PDA?

CHAPTER CASE CONCH REPUBLIC ELECTRONICS nonch Republic Electronics is a midsized electron capability. The company has spent a further $200,000 ics manufacturer located in Key West, Florida. The for a marketing study to determine the expected sales company president is Shelly Couts, who inherited the figures for the new PDA. company. The company originally repaired radios and Conch Republic can manufacture the new PDA other household appliances when it was founded over for $215 each in variable costs. Fixed costs for the 70 years ago. Over the years, the company has ex operation are estimated to run $4.3 million per year. panded, and it is now a reputable manufacturer of vari The estimated sales volume is 65,000, 82,000, ous specialty electronic items. Jay McCanless, a recent 108,000, 94,000, and 57,000 per year for the next MBA graduate, has been hired by the company in its five years, respectively. The unit price of the new finance department. PDA will be $500. The necessary equipment can One of the major revenue-producing items manu be purchased for $32.5 million and will be depre- factured by Conch Republic is a Personal Digital ciated on a seven-year MACRS schedule. It is be- Assistant (PDA). Conch Republic currently has one lieved the value of the equipment in five years will be PDA model on the market and sales have been excel $3.5 million. lent. The PDA is a unique item in that it comes in a Not working capital for the PDAs will be 20 per- variety of tropical colors and is preprogrammed to play cent of sales and will occur with the timing of the cash Jimmy Buffett music. However, as with any electronic flows for the year (.e., there is no initial outlay for NWC). item, technology changes rapidly, and the current PDA Changes in NWC will thus first occur in Year 1 with the has limited features in comparison with newer models. first year's sales. Conch Republic has a 35 percent cor- Conch Republic spent $750,000 to develop a proto porate tax rate and a 12 percent required return. type for a new PDA that has all the features of the Shelly has asked Jay to prepare a report that existing one, but adds new features such as cell phone answers the following questions