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Vehicle speed sensor malfunctioning--2000 Ford Taurus

I need your help in figuring out what is going on with my dad's car. This car is a 2000 Ford Taurus with about 160,000 miles. In the morning, when he starts the car and drives away, sometimes the speedometer will not work and the automatic transmission will not shift out of first gear. After a few miles, the transmission will suddenly upshift and the speedometer will jump from 0 to the current speed. The door locks will also lock at the same time (they normally lock upon reaching a set speed). However, the car can be "forced" to shift, start the speedometer, and lock the doors by accelerating to 5000 RPM. The problem appears to have something to do with the vehicle speed sensor, but I don't know what exactly is wrong with that system. The car also knows that something is up as the Check Engine light is on.

1. What might be wrong with the VSS that causes this problem?
2. Why can it be forced to shift at 5000 RPM?
3. How much will this cost to fix?

Thanks for your help!!
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