suppose snowmobil Inc. is considering whether or not to launch a new Snowmobil. It expect to sell the vehicle for $10,000 over 5 years at a rate of 100 per year. The variable cost of making one unit is $5,000, and the fixed cost are expected to be $125,000 per year. The investment would be $1 million and would be depreciated according to the strainght-line over five year with zero salvage value. Snowmobile Inc.'s cost of capital is 10 percent. the corporate tax is 40 percent. The investment would not require any significant addition to the firm's working capital requirement.

a. what is the net present value of the investment?

b. How many snowmobiles would the compani need to sell to break even (i.e., for the project to have a zero net present value)?

c. At the break-even level, what would be the project's discounted payback period and internal rate of return?