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2 We are evaluating a project that costs $894,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight- line to
2 We are evaluating a project that costs $894,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight- line to zero over the life of the project. Sales are projected at 86,000 units per year. Price per unit is $64, variable cost per unit is $44, and fixed costs are $780,000 per year. The tax rate is 35%, and we require a 10% return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +10%. Calculate the best-case and worst-case NPV figures. (Omit $ sign in your response. Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answers to 2 decimal places.) nts Best-case NPV $ 6942377.06 $ -1233077.21 Worst-case NPV
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