Problem $9-2$ Scenario Analysis

We are evaluating a project that costs $$832,000,$ 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 $40,000$ units per year. Price per unit is $$40,$ variable cost

per unit is $$17,$ and fixed costs are $$700,000$ per year. The tax rate is $23$ percent, and we

require a return of $18$ percent on this project. Suppose the projections given for price,

quantity, variable costs, and fixed costs are all accurate to within $+-10$ percent.

Calculate the best$-$case and worst$-$case NPV figures. $($A negative answer should be

indicated by a minus sign. Do not round intermediate calculations and round your

answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.