Whimsical Corporation is an international manufacturer of fragrances for women. Management at Whimsical is considering expanding the product line to men's fragrances. i (Click the icon to view additional information.) (Click the icon to view the future value of $1 factors.) (Click the icon to vie Future value of $1 factors (Click the icon to view the present value of $1 factors.) (Click the icon to vie Additional information From the best estimates of the marketing and production managers, annual sales (all for cash) for this new line are 1,800,000 units at $106 per unit; cash variable cost is $60 per unit; and cash fixed costs are $14,500,000 per year. The investment project requires $110,000,000 of cash outflow and has a project life of 10 years. At the end of the 10-year useful life, there will be no terminal disposal value. Assume all cash flows occur at year-end except for initial investment amounts. Men's fragrance is a new market for Whimsical, and management is concerned about the reliability of the estimates. The controller has proposed applying sensitivity analysis to selected factors. Ignore income taxes in your computations. Whimsical's required rate of return on this project is 12%. Print Done Compound Amount of $1 (The Future Value of $1) S-P(1+. In this table P-$1. Periods 2% 10% 12% 14% 16% 1 1.160 2 4 5 6 1.082 1.170 1.104 1.217 1.338 1.469 1.611 1.762 1.126 1.265 1.419 1.587 1.772 1.974 1.262 1.360 1.464 7 1.149 1.316 1.504 1.714 8 9 10 11 12 13 14 15 16 1.949 1.172 1.369 1.594 1.851 2.144 1.195 1.423 1.689 1.999 2.358 1.219 1.480 1.791 2.159 2.594 1.243 1.539 1.898 2.332 2.853 1.268 1.601 2.012 2.518 3.138 1.294 1.665 2.133 2.720 3.452 1.319 1.732 2.261 2.937 3.797 1.346 1.801 2.397 3.172 4.177 1.373 1.873 2.540 3.426 4.595 6.130 17 18 19 1.457 2.107 3.026 4.316 1.400 1.948 2.693 3.700 5.054 6.866 1.428 2.026 2.854 3.996 5.560 7.690 6.116 8.613 12.056 4% 6% 8% 1.020 1.040 1.060 1.080 1.100 1.120 1.140 1.040 1.082 1.124 1.166 1.210 1.254 1.300 1.346 1.392 1.440 1.488 1.538 1.061 1.125 1.191 1.260 1.331 1.405 1.482 1.561 1.643 1.728 1.816 1.907 1.574 1.689 1.811 1.939 2.074 2.215 2.364 1.925 2.100 2.288 2.488 2.703 2.932 2.195 2.436 2.700 2.986 3.297 3.635 2.211 2.502 2.826 3.185 3.583 4.023 4.508 2.476 2.853 3.278 3.759 4.300 4.908 5.590 6.353 7.206 8.157 2.773 3.252 3.903 4.435 5.160 5.987 6.931 8.005 9.223 10.604 12.166 3.106 3.707 4.411 5.234 6.192 7.305 8.594 10.086 11.806 13.786 16.060 3.479 4.226 5.117 6.176 7.430 8.912 10.657 12.708 15.112 17.922 21.199 3.896 4.818 5.906 7.288 8.916 10.872 13.215 16.012 19.343 23.298 27.983 4.363 5.492 6.886 8.599 10.699 13.264 16.386 20.175 24.759 30.288 36.937 4.887 6.261 7.988 10.147 12.839 16.182 20.319 25.421 31.691 39.374 48.757 5.474 7.138 9.266 11.974 15.407 19.742 25.196 32.030 40.565 51.186 64.359 8.137 10.748 14.129 18.488 24.086 31.243 40.358 51.923 66.542 84.954 9.276 12.468 16.672 22.186 29.384 38.741 50.851 66.461 86.504 112.139 64.072 85.071 112.455 148.024 80.731 108.890 146.192 195.391 18% 20% 22% 24% 26% 28% 30% 32% 40% Peria 1.180 1.200 1.220 1.240 2.000 2.520 1.260 1.280 1.300 1.320 1.588 1.638 1.690 1.742 2097 2.197 2.300 2.684 2.856 3.036 1.400 1 3.176 3.436 3.713 4.007 1.960 2 2.744 3 3.842 4 5.378 5 4.002 4.398 4.827 5.290 7.530 6 5.042 5.629 6.275 6.983 10.541 7 9.217 14.758 8 20.661 9 28.925 10 40.496 56.694 12 79.371 13 111.120 14 155.568 15 217.795 16 10.575 14.463 19.673 26.623 35.849 48.039 16.777 23.214 31.948 43.736 59.568 304.913 17 426.879 18 597.630 19 Future value annuity of $1 factors Present value of $1 factors Next question Compound Amount of Annuity of $1 in Arrears* (Future Value of Annuity) Present Value of $1 (1+r)* 1 Periods r 2% + 1) In this table S-$1. 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% Periods 2% 4% 6% 8% 10% 12% 14% 16% 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2 2.020 2.040 2060 3 3.060 3.122 3.184 4 4.122 4.246 4.375 4.506 5 5.204 5.416 5.637 5.867 6 6.308 6.633 6.975 7.336 7.716 8.115 7 7.434 7.898 8.394 8.923 9.487 10.089 8 8.583 9.214 9.897 10.637 11.436 12.300 9 10 11 9.755 10.583 11.491 12.488 13.579 14.776 10.950 12.006 13.181 14.487 15.937 17.549 12.169 13.486 14.972 16.645 18.531 20.655 12 13.412 15.026 16.870 18.977 21.384 24.133 13 14.680 16.627 18.882 14 15.974 18.292 21.015 15 17.293 20.024 23.276 16 18.639 21.825 25.673 17 20.012 23.698 28.213 18 21.412 25.645 30.906 37671 1.000 1.000 1.000 2.080 2.100 2.120 2.140 2.160 2.180 2.200 2.240 2.260 3.246 3.310 3.374 3.440 3.506 3.572 3.640 3.778 3.848 4.641 4.779 4.921 5.066 5.215 5.368 5.524 5.684 5.848 6.105 6.353 6.610 6.877 7.154 7.442 7.740 8.048 8.368 8.536 8.977 9.442 9.930 10.442 10.980 11.544 12.136 10.730 11.414 12.142 12.916 13.740 14.615 15.546 16.534 13.233 14.240 15.327 16.499 17.762 19.123 20.588 22.163 21 16.085 17.519 19.086 20.799 22.670 24.712 26.940 29.369 19.337 21.321 23.521 25.959 28.657 31.643 34.945 33.593 23.045 25.733 28.755 32.150 35.962 40.238 45.031 50.398 5 27.271 30.850 34.931 39.581 44.874 50.895 57.739 65.510 74 21.495 24.523 28.029 32.089 36.786 42.219 48.497 55.746 64.110 73.751 84.853 91 24 215 27.975 32.393 37.581 43.672 50.818 59.196 69.010 80.496 93.926 109.612 121 27.152 31.772 37.280 43.842 51.660 60.965 72.035 85.192 100.815 119.347 141.303 161 30.324 35.950 42.753 50.980 60.925 72.939 87.442 104.935 126.011 151.377 181.868 21 33.750 40.545 48.884 59.118 71.673 87.068 105.931 129.020 157.253 191.735 233.791 28 37.450 45.599 55.750 68.394 84.141 103.740 128.117 41 AAC 1,000 1.000 1,000 1.000 1 0.980 0.962 0.943 0.926 0.909 0.893 2.220 2.280 2 0.961 0.925 0.890 0.857 0.826 0.797 3.708 3.918 3 0.942 0.889 0.840 0.794 0.751 6.016 4 8.700 5 6 11 7 0.924 0.855 0.792 0.906 0.822 0.747 0.888 0.790 0.705 0.871 0.760 0.665 0.735 0.683 0.712 0.636 8 0.681 0.621 0.630 0.564 0.583 0.513 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.204 9 10 11 12 13 14 15 16 0.837 0.703 0.592 0.820 0.676 0.558 0.804 0.650 0.527 0.788 0.625 0.497 0.773 0.601 0.469 0.758 0.577 0.442 0.743 0.555 0.417 0.728 0.534 0.394 154 740 211022 158.405 195.994 242.585 300.252 37 285772 17 18 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.463 0.396 0.322 0.270 0.227 0.191 0.162 0.137 0.116 0.099 0.085 0.073 0.062 0.035 10 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 0.094 0.079 0.066 0.056 0.047 0.025 11 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.092 0.076 0.062 0.052 0.043 0.036 0.018 12 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 0.061 0.050 0.040 0.033 0.027 0.013 13 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.062 0.049 0.039 0.032 0.025 0.021 0.009 14 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.051 0.040 0.031 0.025 0.020 0.016 0.006 15 0.292 0.218 0.163 0.123 0.093 0.071 0.054 0.042 0.032 0.025 0.019 0.015 0.012 0.005 16 0714 0.513 0.371 0.270 0.198 0.146 0.108 0.080 0.060 0.045 0.034 0.026 0.020 0.015 0.012 0.009 0.003 17 0.700 0.494 0.350 0.250 0.180 0.130 0.095 0.069 0.051 0.038 0.028 0.021 0.016 0.012 0.007 0.009 0.002 18 0.167 20% 22% 24% 26% 30% 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.769 0.743 0.718 0.694 0.672 0.650 0.630 0.610 0.592 0.574 0.510 0.675 0.641 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.364 0.592 0.552 0.516 0.482 0.451 0.423 0.397 0.373 0.350 0.329 0.260 0.567 0.519 0.476 0.437 0.402 0.370 0.341 0.315 0.291 0.269 0.250 0.186 0.507 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.189 0.133 0.452 0.400 0.354 0.314 0.279 0.249 0.222 0.198 0.178 0.159 0.143 0.095 0.179 0.157 0.139 0.123 0.108 0.068 0.144 0.125 0.108 0.094 0.082 0.048 32% 40% Park 0.758 0.714 1 1 3 Requirement 1. Calculate the net present value of this investment proposal. Begin by determining the formula needed to calculate the annual net cash inflow from the investment proposal. ) x Annual net cash inflow Now calculate the net present value of this investment proposal. (Use factors to three decimal places, X.XXX. Use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value of this investment proposal is $ Requirement 2a. Calculate the effect on the net present value if the selling price per unit is reduced by 15%. (Round selling price per unit to the nearest cent. Use factors to three decimal places, X.XXX. Use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value of this investment proposal if the selling price per unit is reduced by 15% is $. Requirement 2b. Calculate the effect on the net present value (from requirement 1) if the variable cost per unit is increased by 15%. (Round variable cost per unit to the nearest cent. Use factors to three decimal places, X.XXX. Use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value of this investment proposal if the variable cost per unit is increased by 15% is $. Requirement 3. Discuss how management would use the data developed in requirements 1 and 2 in its consideration of the proposed capital investment. The sensitivity analysis performed in requirements 1 and 2 enables management to see the impact on net present value (NPV) from in the sensitivity analysis can help management to The fluctuations in the NPVs as seen