Tiffany Lamps is considering producing a specialty lamp for the next Olympics, which will occur in two years. The new production line will require a $100,000 investment in fixed assets, which will be depreciated straight line to zero over five years. The new lamp will be sold for only three years. At the end of the project, the fixed assets will be sold for $25,000. The project will incur fixed costs of $150,000 per year, and NWC requirements will run at 20 percent of the sales during the year. The firm has a 7 percent cost of capital and a 39 percent marginal tax rate. 3. (EXCEL TEMPLATE) A marketing firm has identified the estimated unit sales, selling price, and variable costs as shown below. What are your worst-case, base-case, and best-case scenarios for the NPV of the project? Unit Sales Sales Price per Unit Variable Cost per Unit Lower Bound 50,000 $6.25 $3.50 Base Case 100,000 $8.00 $4.50 Upper Bound 150,000 $10.00 $5.00 Scenario Analysis Base Case Lower Bound Upper Bound | Life (years) Required Return Tax Rate Initial Cost Salvage Value Unit Sales Variable Cost Selling Price Scenario Analysis Unit Sales Unit Variable Cost Selling Price Income Statement Sales Variable Cost Fixed Cost Depreciation EBIT Tax Net Income Plus Depreciation OCF NPV Year 0 Year 1 Year 2 Year 3 Initial Cost NWC OCF ATSV NWC Total Cash Flow