(Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeriais 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 $103 each and the company analysts performing the analysis expect that the firm can sell 101,000 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 $1,000,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10 9 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 $301,000 in working capital to support the new business Other pertinent information concerning the business venture is provided here mm Data Table B Initial cost of the machine Expected life Salvage value of the machine Working capital requirement Depreciation method Depreciation expense Cash fixed costs-excluding depreciation Variable costs per unit Required rate of return or cost of capital Tax rate $10,900,000 5 years $O I $301,000 straight line $2,180,000 per year $1,000,000 per year $19 10.8% 34% a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a[n) 8 percent decrease in the number of units sold c. Determine the sensitivity of the project's NPV to ain) 8 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a(n) 8 percent increase in the variable cost per unit e. Determine the sensitivity of the project's NPV to a[n) 8 percent increase in the annual fixed operating costs. 1. Use scenario analysis to evaluate the project's NPV under worst- and best-case scenarios for the project's value drivers. The values for the expected or base-case along with the worst- and best case scenarios are listed here: Data Table Unit sales Price per unit Variable cost per unit Cash fixed costs per year Depreciation expense Expected or Base Case 101,000 $103 $(19) $(1,000,000) $(2,180,000) Worst Case 72,720 $94.76 $(20.90) $(1,200,000) $(2,180,000) Best Case 129,280 $124.63 $(17.48) $(910,000) $(2,180,000) Print Done]