Problem 11-6 Scenario Analysis (LO2)

We are evaluating a project that costs $888,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 83,000 units per year. Price per unit is $61, variable cost per unit is $41, and fixed costs are $777,000 per year. The tax rate is 35%, and we require a 10% return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within 10%.

Calculate the best-case and worst-case NPV figures. (Omit $ sign in your response. Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Best-case NPV	$
Worst-case NPV	$