Your company has developed a new type of kitchen blender. The development has cost $780,000. To produce the blender, a new machine is required that will cost $1,600,000 to buy and install. This amount is to be linearly depreciated to zero over the life of the project and there is no salvage value. You expect to be able to sell the new blenders over a 5-year period. The selling price per unit is expected to be $80, variable costs are $55 per unit and fixed costs are $400,000 per year. You've collected the following estimates for unit sales and their respective probabilities: Base case Pessimistic Optimistic Unit sales per year (Q) 71,000 35,500 99,400 Probability 0.4 0.5 0.1 The required return is 10% and the tax rate is 34%. Part 1 | * Attempt 6/15 for 6 pts. What is the NPV in the base case? 0+ decimals Part 2 18 Attempt 3/15 for 10 pts. What is the NPV in the pessimistic case? 0+ decimals Submit Part 3 18 Attempt 1/15 for 10 pts. What is the NPV in the optimistic case? 3760347 Correct Variable Calculation Amount Sales Q*P 7,952,000 5,467,000 - Variable costs Q*VC - Fixed costs FC 400,000 1,600,000/5 320,000 - Depreciation = EBIT 1,765,000 - Taxes EBIT*0.34 600,100 + Depreciation 320,000 NOPAT + DEP 1,484,900 - CAPEX 0 - - ANOWC 0 = FCF 1,484,900 1,484,900 NPV. = 1,600,000 + (1-11) 4,028,939 0.1 Part 4 | Attempt 4/15 for 10 pts. What is the expected NPV? 0+ decimals