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12 We are evaluating a project that costs $859,000, has a life of eleven years, and has no salvage value. Assume that depreciation is straight-line
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We are evaluating a project that costs $859,000, has a life of eleven years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 157,000 units per year. Price per unit is $38, variable cost per unit is $25, and fixed costs are $874,462 per year. The tax rate is 23 percent, and we require a return of 14 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/12 percent. a. Calculate the best-case NPV. Best case b. Calculate the worst-case NPVStep by Step Solution
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