Tony Stark is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $96 each, and the company analysts performing the analysis expect that the firm can sell 103,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology.

In addition, variable costs are expected to be $19 per unit and fixed costs, not including depreciation, are forecast to be $1,080,000 per year. To manufacture this product, Tony Stark will need to buy a computerized production machine for $10.4 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $306,000 in working capital to support the new business.

Other pertinent information concerning the business venture is provided here:

a) Calculate the project's NPV

b) Following the previous question, determine the sensitivity of project's NPV to 8 percent decrease in the number of units sold will be.

c) Following the previous question, determine the sensitivity of project's NPV to 8 percent increase in the variable cost per unit will be.

Please write the equation, thank you!

InitialcostofthemachineExpectedlifeSalvagevalueofthemachineWorkingcapitalrequirementDepreciationmethodDepreciationexpenseCashfixedcosts-excludingdepreciationVariablecostsperunitRequiredrateofreturnorcostofcapitalTaxrate$10,400,0005years$0$306,000straightline$2,080,000peryear$1,080,000peryear$1910.4%34%