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Firm XXX is evaluating a project that costs $980,000, has no salvage value. Assume. that depreciation is straight-line to zero over the life of the
Firm XXX is evaluating a project that costs $980,000, has no salvage value. Assume. that depreciation is straight-line to zero over the life of the project. Sales are projected. at 60,000 units per year. Price per unit is $60, variable cost per unit is $30, and fixed costs are $750,000 per year. The tax rate is 35% and we require a 15% return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate within +- 15%. What is the. worst case NPV respectively? SHOW ALL WORK.
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