RadGrover is thinking of developing a new composite road bike. Development will take four years and the cost is $100,000 per year. Once in production, the bike is expected to make $300,000 per year for 10 years. Assume the cost of capital is 10%.

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

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

3. What is the NPV of the investment if the cost of capital is 14%

(If you wouldn't mind attaching the excel file so I can follow all the actual formulas and everything as well would be appreciated, thank you).