Superfast Bives is thinicing of developing a new composite road bike. Development will require that the company pay a cost at $206,500) at the end of each year tar the next ti years. Once development of the bike has been completed 15 years from now, sales of the bike is expected to generale $206, 102 of me. cash inllow per year for the fulluwing 10 years. Assume that the cast inlows are received by the company at the end of each yearly sales period, with the first inflow arriving 7 years from today. Assurning the cost of capital is 7.7% per annun: a. The NPV of this investment opportunity is S 317839 (Round your answer to the nearest dollar Your last answer was interpreted as follows: 317839 The company should make this investment (Select the best choice buluw) Trie b. The IRR of this testment opportunity is 12 (Round your answer to two decimal plores) . Your last answer was interpreted as follows: 12 Nole: The Ill for this question will require Excel ur a lirarcial calcula lui. Sluidents will not be required to do this is an exam unless you are luld explicitly Lu du so. In Excel, you could try either the =TRR [unction or you could try to use Gual Seek' loni Dale -> Whal-Ii Analysis -> Goal Seeki. Assume that you have estimated that the correct cost of capitalis 7.7%Given the IRR you have calculated previously. boy how much could your cost of capital estimate be wrong" by without changing your overall decision about accepting or rejecting the project? The maximum possible deviation in our cost of capital estimate that would leave our final decision unchanged is 43 (Hound your answer to two decimal places. Please enter this deviation as a positive number te. Give the absolite value) leg. Hypothetically (using different numbers, if you estimated on IRR of 42.00% and the project's cost of capital is estimated to be 69.00% your decision would be be to reject. And that cost of capital estimate cooid deviate by just under 27.00% from your angirai estimate of 69.00% and you'd still get the part. An answer of 27.00% would therefore be the maximum possible deviation.) Your last answer was interpreted as follows: 4.3 years. c. For the decision to change development must last 100 (Round your answer to two decimal places) Your last answer was interpreted as follows: 100% Assuming now that the cast of capital is instead 12.0% per annum: d. The NPV of this investment opportunity is 8-9612 (Round your answer to the nearest dollar V positive NPV answer does not require a sigri. A negative NPV requires you to use the sign) Your last answer was interpreted as follows: -9613 : The company should make this investment (Select the best choice below) Falso e. If the cost of capital is 12.01%, the maximum deviation allowabla in the cost of capital estimate to leave the decision that you just chose abowa) unaitarted is 0 (flourd your answer to two decimal places Pleuse enter this cleviction us u positive number in. Give the skile vulue) leg. Hypothetically using different numbers). If you estimated on NPV of 123456789 dollors when project's cost of copital is estimated to be say 27, your decision would be be to accept And if you estimated that the project would have an NPV of zero of a discount rate of 12%, then the actual cost of capital estimate of 27% could devlore by just under +15% from your original estimate of 27% and you'd still accept the project an answer of 15% would therefore be the maximum possible deviation) Your last answer was interpreted as follows: years. f. For the decision to change development must last 100 (flourd your uriww lu two decimal places Superfast Bives is thinicing of developing a new composite road bike. Development will require that the company pay a cost at $206,500) at the end of each year tar the next ti years. Once development of the bike has been completed 15 years from now, sales of the bike is expected to generale $206, 102 of me. cash inllow per year for the fulluwing 10 years. Assume that the cast inlows are received by the company at the end of each yearly sales period, with the first inflow arriving 7 years from today. Assurning the cost of capital is 7.7% per annun: a. The NPV of this investment opportunity is S 317839 (Round your answer to the nearest dollar Your last answer was interpreted as follows: 317839 The company should make this investment (Select the best choice buluw) Trie b. The IRR of this testment opportunity is 12 (Round your answer to two decimal plores) . Your last answer was interpreted as follows: 12 Nole: The Ill for this question will require Excel ur a lirarcial calcula lui. Sluidents will not be required to do this is an exam unless you are luld explicitly Lu du so. In Excel, you could try either the =TRR [unction or you could try to use Gual Seek' loni Dale -> Whal-Ii Analysis -> Goal Seeki. Assume that you have estimated that the correct cost of capitalis 7.7%Given the IRR you have calculated previously. boy how much could your cost of capital estimate be wrong" by without changing your overall decision about accepting or rejecting the project? The maximum possible deviation in our cost of capital estimate that would leave our final decision unchanged is 43 (Hound your answer to two decimal places. Please enter this deviation as a positive number te. Give the absolite value) leg. Hypothetically (using different numbers, if you estimated on IRR of 42.00% and the project's cost of capital is estimated to be 69.00% your decision would be be to reject. And that cost of capital estimate cooid deviate by just under 27.00% from your angirai estimate of 69.00% and you'd still get the part. An answer of 27.00% would therefore be the maximum possible deviation.) Your last answer was interpreted as follows: 4.3 years. c. For the decision to change development must last 100 (Round your answer to two decimal places) Your last answer was interpreted as follows: 100% Assuming now that the cast of capital is instead 12.0% per annum: d. The NPV of this investment opportunity is 8-9612 (Round your answer to the nearest dollar V positive NPV answer does not require a sigri. A negative NPV requires you to use the sign) Your last answer was interpreted as follows: -9613 : The company should make this investment (Select the best choice below) Falso e. If the cost of capital is 12.01%, the maximum deviation allowabla in the cost of capital estimate to leave the decision that you just chose abowa) unaitarted is 0 (flourd your answer to two decimal places Pleuse enter this cleviction us u positive number in. Give the skile vulue) leg. Hypothetically using different numbers). If you estimated on NPV of 123456789 dollors when project's cost of copital is estimated to be say 27, your decision would be be to accept And if you estimated that the project would have an NPV of zero of a discount rate of 12%, then the actual cost of capital estimate of 27% could devlore by just under +15% from your original estimate of 27% and you'd still accept the project an answer of 15% would therefore be the maximum possible deviation) Your last answer was interpreted as follows: years. f. For the decision to change development must last 100 (flourd your uriww lu two decimal places