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Rlinkcria is considering introducing a new line of hand scanners that can he used to copy material and then download ii into a personal computer.

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Rlinkcria is considering introducing a new line of hand scanners that can he used to copy material and then download ii into a personal computer. These scanners are expected to sell for an average price of $100 each, and the company analysts performing the analysis expect that the firm can sell 100,000 units per year at this price for a period of five years, alter which time they expect demand for the product to end as a result of new technology In addition, variable costs arc expected to he S20 per unit, and fixed costs. not including depreciation, are forecast to be $1 .(XX).(XX) per year To manufacture this product. Rlinkcria Mill need to buy a computerized production machine for SKI million that has no residual or salvage value, and will have an expected life of live years In addition, the firm expects it will have to invest an additional S.HXMXX) in working capital to support the new business. Other pertinent inhumation concerning the business venture is as follows: Calculate the project's NPV. Determine the sensitivity of the project's NPV t a 10 percent decrease in the number of units sold. Determine the sensitivity of the project's NPV to a Id percent decrease in the cost per unit. Determine the sensitivity of tin- project's NPV to a 10 percent increase in the variable cost per unit. Determine the sensitivity of the project s NPV to a 10 percent increase in the annual fixed operating costs. Use scenario analysis to evaluate the project's NPV under worst- and best-ease scenarios tor the project's value drivers. The values for the expected or base-case along with the worst- and best-caae scenarios arc as follows

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