$($Please write answers in order$)$ FastTrack$$ Bikes, Inc. is thinking of developing a new composite road bike. Development will take $6$ years and the cost is $$193,000$ per year. Once in$$ production, the bike is expected to make $$$$289,500$ per year for $10$ years. Assume the cost of capital is $11\%.$

a$.$ Calculate the NPV of this investment$$ opportunity, assuming all cash flows occur at the end of each year. Should the company make the$$ investment?

b$.$ By how much must the cost of capital estimate deviate to change the$$ decision? $($Hint$$: Use Excel to calculate the$$ IRR.$)$

c$.$ What is the NPV of the investment if the cost of capital is $14\%?$

Note$$: Assume that all cash flows occur at the end of the appropriate year and that the inflows do not start until year $7.$

a$.$ Calculate the NPV of this investment$$ opportunity, assuming all cash flows occur at the end of each year. Should the company make the$$ investment?

$($answer given$)$The present value of the costs is $$$$816,494.($Round to the nearest$$ dollar.$)$

Part $2$

$($answer given$)$The present value of the benefits is $$$$911,527.($Round to the nearest$$ dollar.$)$

Part $3$

$($answer given$)$ The NPV of the investment opportunity is $$$$95,033.($Round to the nearest$$ dollar.$)$

Part $4$

b$.$ By how much must the cost of capital estimate deviate to change the$$ decision? $($Hint$$: Use Excel to calculate the$$ IRR.$)$

The IRR of the investment opportunity is $\_\_\_\%.($Round to two decimal$$ places.$)$

Part $5$

To change the$$ decision, the deviation would need to be $\_\_\_\%.($Round to two decimal$$ places.$)$

Part $6$

c$.$ What is the NPV of the investment if the cost of capital is $13\%?$

If the cost of capital is $14\%,$ the present value of the costs is $$$$\_\_\_.($Round to the nearest$$ dollar.$)$

Part $7$

If the cost of capital is $14\%,$ the present value of the benefits is $$$$\_\_\_.($Round to the nearest$$ dollar.$)$

Part $8$

If the cost of capital is $\_\_\_14\%,$ the NPV of the investment is $$$$\_\_\_.($Round to the nearest$$ dollar.$)$