(Related to Checkpoint 13.3) (Scenario analysis) Family Security is considering introducing tiny GPS trackers that can be inserted in the sole of a child's shoe, which would then allow for the tracking of that child if he or she was ever lost or abducted. The estimates, that might be off by 8 percent (either above or below), associated with this new product are shown here:

Since this is a new product line, you are not confident in your estimates and would like to know how well you will fare if your estimates on the items listed above are 8 percent higher or 8 percent lower than expected. Assume that this new product line will require an initial outlay of $1.13 million, with no working capital investment, and will last for 10 years, being depreciated down to zero using straight-line depreciation. In addition, the firm's required rate of return or cost of capital is 10.2 percent, and the firm's marginal tax rate is 34 percent. -Calculate the project's NPV under the "best-case scenario" (that is, use the high estimatesunit price 8 percent above expected, variable costs 8 percent less than expected, fixed costs 8 percent less than expected, and expected sales 8 percent more than expected). -Calculate the project's NPV under the "worst-case scenario."

Unitprice:Variablecosts:Fixedcosts:$122$76$247,000peryear Expected sales: 10,400 per year