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Q3. (25 marks)Lower BoundExpected ValueUpper BoundSales quantity Sales price per unit Variable cost per unit Fixed cost95001000010500$9.75$10.00$10.25$4.80$5.20$5.60$15,000.00$18,000.00$21,000.00Initial requirement for equipment: S120,000 Depreciation: Straight-line to zero
Q3. (25 marks)Lower BoundExpected ValueUpper BoundSales quantity Sales price per unit Variable cost per unit Fixed cost95001000010500$9.75$10.00$10.25$4.80$5.20$5.60$15,000.00$18,000.00$21,000.00Initial requirement for equipment: S120,000 Depreciation: Straight-line to zero over the four-year life of the project with no salvage value. Required rate of return: 15% Marginal tax rate: 35%Calculate NPV according to best case scenario.
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