Problem: Suppose a firm is considering the following project, where all the dollar figures are in thousands of dollars. In year 0, the project requires an $13,350 investment in plant and equipment (PPE), is depreciated using the straight-line method over seven years, and has salvage value of $2,500 in year 7. The project is forecast to generate sales of 2,000 units in year 1, rising to 7,400 units in year 5, declining to 2,500 units in year 7, and dropping to zero in year 8. The inflation rate is forecast to be 2% in year 1, rising to 4.5% in year 7. The tax rate is forecast to be constant 25%. Sales revenue per unit is forecast to be $11.7 in year 1 and then grow with inflation. Variable cost per unit is forecast to be $6.7 in year 1 and then grow with inflation. Fixed costs are forecast to be $4,380 in year 1 and then grow with inflation. Interest expenses are forecast to be $500 in year 1 and then grow with inflation. Q1: What is the projects NPV? Q2: What would be the net present value when variable cost per unit and tax rate change? Equations: : = =(1+ )(1+ %)1 :(1+ 1) (1+ )1 = ;:= + (): = = + = + & = (1+) , = (1+) =1 +0 : : ; 0: 0 ( ) : "cumulative discount factor" when you compute present value.

Please be specific as possible, answer must be in excel format. Thank you!