Question
Anna is reviewing a new 5-year project with expected sales of 3,400 units, give or take 8%. The expected variable cost per unit is $22
Anna is reviewing a new 5-year project with expected sales of 3,400 units, give or take 8%. The expected variable cost per unit is $22 and the expected fixed costs are $47,500. Cost estimates are considered accurate within a plus or minus 2% range. The depreciation expense is $17,800. The sale price is estimated at $45/unit, give or take 3%. The project initially requires $165,000 of fixed assets and $42,000 of net working capital. At The end of the project, the networking capital will be recouped and the fixed assets will produce an after-tax cash inflow of $35,000. The tax rate is 21% and the discount rate is 14%. What is the net present value of the best-case scenario?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started