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A company is analyzing a proposed 3 year project using standard sensitivity analysis. The company expects to sell 1 5 , 0 0 0 units,

A company is analyzing a proposed 3 year project using standard sensitivity analysis. The company expects to sell 15,000 units, 5 percent. The expected variable cost per unit is $8 and the expected fixed costs are $40,000.The fixed and variable cost estimate are considered accurate within a 7 percent range. The sales price is estimated at $15 a unit, 6 percent. The project requires an initial investment of $120,000 for equipment that will be depreciated using straight line method to zero over the project's life. The equipment can be sold for $30,000 at the end of the project. The project requires $12,000 in net working capital for the three years but will be fully recovered when the project closes. The discount rate is 16.4 percent and tax rate is 20 percent. What is the net present value for the optimistic scenario?

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