Orcid Berhad is considering a project which requires an investment of RM200,000, and the managers are somewhat confident of their estimates of all the projects cash flow variables except for unit sales.

Further, they consider a drop in sales below 30,000 units or a rise above 50,000 units as being extremely unlikely.

The selling price per unit is RM20. The labor costs per unit are RM8 and the material costs per unit are RM3. The fixed costs are RM50,000 per annum (relevant) and the project does not require any additional working capital.

The projected project is for a year and the cost of capital is 10%.

From the above information you are required to answer the following questions.

1. Calculate the Net Present Value for this project under best-case scenario and worst-case scenario. Given below is the estimated figure under different scenario: (8 Marks)

	Selling price	Labor costs	Material costs
Best-case	+5%	- 5%	- 5%
Worst-case	-5%	+5%	+5%

2. Based on your answer in part (a), interpret your findings. (2 Marks)

P/S : PLEASE PROVIDE FULL CALCULATION .