Problem $7-13$ Project Analysis

You are considering a new product launch. The project will cost $$920,000,$ have a $4-$year life, and have no salvage value; depreciation is straight$-$line to zero. Sales are projected at $580$ units per year, price per unit will be $$19,400,$ variable cost per unit will be $$16,100,$ and fixed costs will be $$980,000$ per year. The required return on the project is $14$ percent, and the relevant tax rate is $25$ percent.

a$.$ The unit sales, variable cost, and fixed cost projections given above are probably accurate to within $\backslash$pm $10$ percent. What are the upper and lower bounds for these projections? What is the base$-$case NPV$?$ What are the best$-$case and worst$-$case scenarios? $($A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your NPV answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$\backslash$table$[[,$Upper bound,Lower bound$],[$Unit sales,,$],[$Variable cost per unit,,$],[$Fixed costs,,$]]$

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