You are a financial analyst working in the finance department of Safe-Drive Limited. Safe-Drive is a publicly listed company that specializes in the production of auto parts. The mass production of Safe-Drive relies heavily on the use of machinery. The company has 1,756,000 shares outstanding trading on the stock exchange, and it is currently trading at $3.20 per share. Part 1 Safe-Drive Limited is an auto-parts manufacturer with a large customer base due to its quality products. Currently, Safe-Drive is in a negotiation with a large auto-parts chain, Extracheap Limited, to supply its brake parts in a private label for Extracheap. Under the terms, Safe-Drive is expected to supply multiple brake parts to Extracheap every year for the next eight years. However, some managers and employees of Safe-Drive are not happy with this negotiation as they are anticipating that the overall production quality of the company will be waned by producing parts for Extracheap and it will damage the reputation of Safe-Drive. If Safe-Drive proceeds with the supply of brake parts, the company needs to purchase machinery to cope with the increase in production. New machinery is expected to cost $2,800,000, with an additional $500,000 in transportation and installation costs. The machinery is expected to have a working life of 10 years. The companys accounting policy is to depreciate using the straight-line approach of 9% per year. It is expected that the new machinery can be sold for $460,000 at the end of the project life. If Safe-Drive is to proceed with the supply of brake parts to Extracheap, it is expected that the yearly operating revenues would increase by $3,600,000 in year one. From year two onwards, it is expected that the increase in yearly operating revenues would grow at a rate of 5% per annum. Total variable costs associated with the increased production would be 60% of the increase in yearly operating revenues. The fixed costs associated with the increased production are expected to be $480,000 per year. Furthermore, there would be an initial increase in net working capital of $360,000. From year one to year seven, net working capital is expected to increase by $15,000 per year. All the net working capitals can be recovered at the end of the projects life. The sales manager predicts that the existing brake parts sales revenue of Safe-Drive will decrease by $400,000 per annum if Safe-Drive proceeds with the supply of brake parts to Extracheap as some marginal or one-off customers will switch from Safe-Drive quality brand to economy brand of Extracheap. Consequentially, decreasing sales will decrease production and the existing operating costs would decrease by $125,000 per annum. Given that this projects risk level is not significantly different, you believe that it is appropriate to use the existing WACC of 14.00%. The companys capital structure has remained fairly stable, with a debt-to-equity ratio of 0.55. The company has no plan to adjust its capital structure in the future. The company tax rate is 30%. Furthermore, the CEO is concerned about the uncertainties in relation to some of the cash flows and suggested conducting a sensitivity analysis as follows: 1. Allow for a 25% probability that incremental revenues associated with the supply of private label brake parts would be 20% lower than expected starting from year five. 2. Allow for a 25% probability that incremental revenues associated with the supply of private label brake parts would be 20% higher than expected starting from year five. answe must be in excel format