Suppose you made the baseline assumptions when both interest rate and inflation rate were low. The economic conditions are very different now. Therefore, it is worthwhile reevaluating the project. In this part, you need to update and justify your assumptions, integrate the ESG factors into your evaluation, and quantitatively re-estimate the NPV of the project. More specifically, you need to update the assumptions for the following parameters and must provide your justifications. You must discuss how the ESG Assumptions Baseline Updated Initial Capital Expenditure (in thousands) $9,000 Sales in Year 1 (in thousands) $30,000 Sales Growth Rate per Year through Year 6 6% Sales Growth Rate in Year 7 and beyond 2% Free Cash Flow Growth Rate in Year 7 and beyond 2% Cost of Goods Sold (% of sales) 72% Initial Net Working Capital (in thousands) $6,000 Accounts Receivable % of Next Year Sales (Year 1 and beyond) 15% Inventory % of Next Year COGS (Year 1 and beyond) 20% Accounts Payable % of Next Year COGS (Year 1 and beyond) 15%

For simplicity, dont change the assumptions on the following parameters: Useful Life of Equipment Incremental SG&A Expense Market Research Expense Interest Expense Tax Rate Cost of capital Dont forget that you need to update the DCF analysis in the sheet Updated DCF Analysis. Compare the updated NPV with the NPV in the baseline DCF analysis. Comment on whether the difference in the NPV is reasonable. Note that the change in NPV (= updated NPV baseline NPV) doesnt have to be negative. It can be positive for some firms (E.g., due to more Nintendo switch sales or more Netflix subscribers.)

Attach your updated DCF analysis (rows 3-57) in the word document.