Pessimistic
Expected
Optimistic

You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphitelike material in its tennis rackets. The company has estimated the information in the following table about the market for a racket with the new material. The company expects to sell the racket for 6 years. The equipment required for the project will be depreciated on a straight-line basis and has no salvage value. The required return for projects of this type is 13 percent and the company has a 23 percent tax rate. Pessimistic Expected Optimistic Market size 113,000 123,000 135,000 Market share 19% 23% 25% Selling price 164 $ 169 $ 173 Variable costs per $ 106 $ 102 $ unit Fixed costs per year $ 978,000 $ 923,000 $ 893,000 Initial investment $1,968,000 $1,818,000 $1,798,000 99 Calculate the NPV for each case for this project. Assume a negative taxable income generates a tax credit. (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)