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Sensitivity Analysis. Emperor's Clothes Fashions can invest $ 5 million in a sew plant for producing insisible makeup. The plant has an expected life of

Sensitivity Analysis. Emperor's Clothes Fashions can invest $5 million in a sew plant for producing insisible makeup. The plant has an expected life of 5 years, and expected sales are 6 million jars of makeup a year. Fixed costs are $2 million a year, and variable costs are $1 per jar. The product will be priced at $2 per jar. The plant will be depreciated straight-line over 5 years to as satvage valuc of zero. The opportunity cost of capital is 10%, and the tax rate is 40%
a. What is projest NPV under these hase-cast ascumptuons?
b. What is NPV if variable costs turn out to be $1.20 per jar?
c. What is NPV if fixed costs turn out to be 1.5 mittion per year?
d. At what price per jar woukd project NPV is zero?
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