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Consider a project with a 6-year life. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated
Consider a project with a 6-year life. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated to zero over the life of the project and there is no salvage value. The required return is 13% and the tax rate is 34%. The price per unit is $50, variable costs are $20 per unit and fixed costs are $30,000 per year. You've collected the following estimates for unit sales: Unit sales per year (Q) 6,000 4,000 Base case Pessimistic Optimistic 8,000 Part 1 What is the NPV in the base case? 0+ decimals Submit Attempt 1/6 for 10 pts. Part 2 What is the NPV in the pessimistic case? Attempt 1/6 for 10 pts. 0+ decimals Submit
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