(Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $103 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,030,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.9 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $302,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a[n) 8 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a[n) 8 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a[n) 8 percent increase in the variable cost per unit. . Notermine the coneitivity of the arniert'e NPV to sin norront increace in the annual fived oneration cnete a. The NPV for the base-case will be $. (Round to the nearest dollar.) (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $103 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,030,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.9 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $302,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a(n) 8 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a[n) 8 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a[n) 8 percent increase in the variable cost per unit. a notormine the coneitivity of the niorte NPV to snl narrant increace in the annual fived oneration coete a. The NPV for the base-case will be $. (Round to the nearest dollar.) (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $103 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,030,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.9 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $302,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: 5 a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a(n) 8 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a(n) 8 percent decrease in the price per unit d. Determine the sensitivity of the project's NPV to a(n) 8 percent increase in the variable cost per unit. a netermine the concitivity of the priarte NPV to ani A narrant increase in the annual fived oneration coete a. The NPV for the base-case will be $. (Round to the nearest dollar.) * Data Table 1 Initial cost of the machine Expected life Salvage value of the machine Working capital requirement Depreciation method Depreciation expense Cash fixed costs-excluding depreciation Variable costs per unit Required rate of return or cost of capital Tax rate $10,900,000 5 years $0 $302,000 straight line $2,180,000 per year $1,030,000 per year $20 10.4% 34% Print Done Enter your answer in the answer box and then click Check Answer. 6 parts remaining Clear All Check Answer this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,030,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.9 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $302.000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: 5 a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a(n) 8 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a(n) 8 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a(n) 8 percent increase in the variable cost per unit. e. Determine the sensitivity of the project's NPV to a[n) 8 percent increase in the annual fixed operating costs. f. Use scenario analysis to evaluate the project's NPV under worst- and best-case scenarios for the project's value drivers. The values for the expected or base-case along with the worst- and best-case scenarios are listed here: a. The NPV for the base-case will be $ . (Round to the nearest dollar.) Data Table Unit sales Price per unit Variable cost per unit Cash fixed costs per year Depreciation expense Expected or Base Case 110.000 $103 $(20) $(1,030,000) $(2.180,000) Worst Case 77,000 $90.64 $(22.20) $(1.246,300) $(2.180,000) Best Case 143,000 $123.60 $(18.40) $(906,400) $(2,180,000) Print Done Enter your answer in the answer box and then click Check Answer. 6 parts remaining Clear All Check