Suppose a firm is considering a labor$-$saving investment. In year $0,$ the project requires a $$11\mathrm{.}700$ investment it equipment $($all fgures are in thousands of dollars$).$ This invesiment is depreciated using the straight$-$line method over five years and there is salvage value in year $5$ of $54,500,$ With or without the cost$-$reducing investment, all cash flows start in year I and end in year $5.$ The inflation rate is $2\mathrm{.}6\%$ in year $2$ and declines to $1\mathrm{.}4\%$ in year $5.$ The real growth rate is $21\mathrm{.}3\%$ in year $2$ and declines to $9\mathrm{.}5\%$ in year $5.$ The tax rate is $41\mathrm{.}0\%$ in all years. The reel cost of capital is $3\mathrm{.}7\%$ in year $1$ and declines to $7\mathrm{.}5\%$ in year $5.$ Without the cost$-$relucing investnent, the fim's existing investments will generate year $1$ revenue, labor costs, other cash expenses, and depreciation of $$15,200,$$$4,100,$$$5,300$ and $$3,300,$ respectively. With the cost$-$reducing investment, the firm's year $1$ lahor costs will be $$1,600$ and revenses and other cash expenses will remain the same. What is the cest$-$reducing project's NPV$?$

For the same cost$-$reducing project as problem I, analyze the sersitivity of the Project NPV to the assumed With Investment $t$ ahor Costs.