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A project under consideration costs $500,000, has a five-year life and has no salvage value. Depreciation is straight-line to zero. The firm has made the
A project under consideration costs $500,000, has a five-year life and has no salvage value. Depreciation is straight-line to zero. The firm has made the following projections related to this project: Unit Sales Price Per Unit Variable Cost Per Unit Fixed Costs Base Lower Case Bound 3,000 2,850 $400 $380 $250 $238 $250,000 $237,500 Upper Bound 3,150 $420 $263 $262,500 The required return is 18 percent and the tax rate is 21 percent. No additional investment in net working capital is required. Requirement 1: What are the worst-case and best-case scenarios for this project? (Input unit sales as number of units. Round all other answers to the nearest whole dollar (e.g., 32).) Worst Case Best Case $ Unit Sales Price Per Unit Variable Cost Per Unit Fixed Costs Alta
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