Snow Inc. has developed a powerful efficient snow blower that is significantly less polluting than existing snow blowers currently on the market. The company spent $$1,500,000$ developing this product and the marketing department spent another $$350,000$ to assess the market demand. It would cost $$25$ million at Year $0$ to buy the equipment necessary to manufacture the efficient snow blower. The project would require net working capital at the beginning of each year equal to $20\%$ of sales $($NOWC$0=20\%($Sales$1),$ NOWC$1=20\%($Sales$2),$ etc.$).$ The efficient snow blowers would sell for $$3,600$ per unit, and the company believes that variable costs would amount to $$1100$ per unit. The company expects that the sales price and variable costs would increase at the inflation rate of $4\%$ after year $1.$ The company$$s non$-$variable costs would be $$800,000$ in Year $1$ and are expected to increase with inflation. The efficient snow blower project would have a life of $4$ years. If the project is undertaken, it must be continued for the entire $4$ years. Also, the project is expected to be of average risk. The firm believes it could sell $3,500$ units per year.

The equipment would be depreciated using a CCA rate of $30\%.$ The estimated market value of the equipment at the end of the project$$s $4-$year life is its undepreciated capital cost $($i$.$e$.$ book value$)$ at the end of year $4.$ The company has other assets in this asset class. Its federal$-$plus$-$provincial tax rate is $30\%.$ Its cost of capital is $7\%$ for average risk projects. Low$-$risk projects are evaluated with a WACC of $6\%,$ and high$-$risk projects at $10\%.$ Assume that the half$-$year rule applies to the CCA. a$.$ Develop a spreadsheet model and use it to find the project$$s NPV$,$ IRR, and payback. Part $1.$ Input Data $($in thousands of dollars except for unit amount$)$ Part $2.$ CCA Schedule Part $3.$ Projected Net Cash Flows $($Time line of annual cash flows$)$Part $4.$ Key Output: Appraisal of the Proposed ProjectData for Payback Yearsb. Now conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and number of units sold. Set these variables$$ values at $10\%$ and $25\%$ above and below their base case values. Include a graph in your analysis.Evaluating Risk: Sensitivity AnalysisNote about data tables. The data in the column input should NOT be input using a cell reference to the column input cell. For example the base case number of units sold in cell B$100$ should be the number $1000$; you should NOT have the formula $=$D$29$ in that cell. This is because you'll use D$29$ as the column input cell in the data table and if Excel tries to iteratively replace cell D$29$ with the formula $=$D$29$ rather than a series of numbers, Excel will calculate the wrong answer. Unfortunately, Excel won't tell you that there is a problem, so you'll just get the wrong values for the data table!c$.$ Would you recommend that the project be accepted? Explain. $-$ Please do all of the steps and show formulas as well as follow the setup shown in the pictures. Thank you