1. 2.

We are evaluating a project that costs $775,000, has a life of nine years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 83,000 units per year. Price per unit is $38, variable cost per unit is $21, and fixed costs are $778,100 per year. The tax rate is 22 percent, and we require a return of 17 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 14 percent. a. Calculate the best-case NPV. b. Calculate the worst-case NPV. Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $1.94 per unit, and the variable labor cost is $3.88 per unit. a. What is the variable cost per unit? b. Suppose the company incurs fixed costs of $730,000 during a year in which total production is 292,000 units. What are the total costs for the year? c. If the selling price is $9.45 per unit, what is the NSI break-even on a cash basis