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2. Suppose that you are considering the acquisition of a factory that specializes in the manufacture of nose hair trimmers. The Trimmer is marketed on television for $9.99, is battery operated, and uses a swirling blade much like the Norelco razor. The factory manufactures about 1,000,000 units per year, sells the trimmer to the wholesaler for $6.37 per unit, and has a cost of manufacture of $1.87 per unit. If the factory must rent space for $1,000,000 per year, the expected life of the equipment is 15 years, demand is estimated to be steady, and the tax rate is 28%, what is the NPV if you pay $25,000,000 for the factory and your required return is 15% (after-tax)? Show a detailed pro-forma financial model. You should not need Excel to do this problem. 3. Conduct a sensitivity analysis of the trimmer factory in the problem above. Assume the following scenarios: a) Price increases by 10% b) Demand increases by 10% c) Price increases by 10% and demand increases y 10% Find the NPV and IRR for each scenario. Show a detailed pro-forma financial model. You should not need Excel to do this problem. 4. For problem 2, conduct a NPV breakeven analysis for the following 3 inputs: a. Units b. Price c. Rent Show a detailed pro-forma financial model. You should not need Excel to do this problem. 2. Suppose that you are considering the acquisition of a factory that specializes in the manufacture of nose hair trimmers. The Trimmer is marketed on television for $9.99, is battery operated, and uses a swirling blade much like the Norelco razor. The factory manufactures about 1,000,000 units per year, sells the trimmer to the wholesaler for $6.37 per unit, and has a cost of manufacture of $1.87 per unit. If the factory must rent space for $1,000,000 per year, the expected life of the equipment is 15 years, demand is estimated to be steady, and the tax rate is 28%, what is the NPV if you pay $25,000,000 for the factory and your required return is 15% (after-tax)? Show a detailed pro-forma financial model. You should not need Excel to do this problem. 3. Conduct a sensitivity analysis of the trimmer factory in the problem above. Assume the following scenarios: a) Price increases by 10% b) Demand increases by 10% c) Price increases by 10% and demand increases y 10% Find the NPV and IRR for each scenario. Show a detailed pro-forma financial model. You should not need Excel to do this problem. 4. For problem 2, conduct a NPV breakeven analysis for the following 3 inputs: a. Units b. Price c. Rent Show a detailed pro-forma financial model. You should not need Excel to do this

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