FX, Inc. is a volume manufacturer of high technology automotive mirrors (including cell link and voice activation). FX is looking to expand their operations to add a second product line capable of producing 1.3 Million units per year. The equipment investment cost for this new operation is $27 Million. The project falls under a 7 year MACRS class life and the company estimates that the salvage value will be $2.7 Million at the end of the 6 year project. The average selling price for each mirror is $85 per unit. The annual expected sales shown below: Year 2018 2019 2020 2021 2022 2023 Volume (000) 600 750 1000 1200 1200 1200 The material cost for each mirror is $20 (with 20 % of the material imported from Canada and 30% from China). The labor to produce each mirror is $13 with additional variable cost of manufacturing at $15 per unit. The fixed cost of manufacturing operations is $10 Million per year. FX maintains 1 month of raw materials and 1 month of WIP and finished goods combined to balance overall automotive demand. Assume that FX has a federal tax rate of 35% and a state tax rate of 4%. Also assume that FX uses a MARR of 15% for all economic analyses. a) Assume the material cost and inflation (material, labor, overhead) can fluctuate over next 6 years similar to the past 6 years. Put together a cash flow model (using simulation) to project the NPV b) Maintain the same material cost and inflation model. Assume that the company has a 10% chance of the program ending early and a 30% chance of extending another year with the 2023 volume, generate an NPV distribution using simulation. c) Assume that the production volume can fluctuation +/- 5% each year from projected, how does this change the NPV distribution (assume the same material cost, inflation, and project length as in a and b)?