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solve the case please in excel 1. You are considering a start of a new product line. $800,000 4 years Project cost Project life Depreciation
solve the case please in excel
1. You are considering a start of a new product line. $800,000 4 years Project cost Project life Depreciation Feasibility study Sales units Price per unit Variable cost per unit Fixed costs straight-line to zero $10,000 $450 units per year $18,000 $15,400 $610,000 per year The required return on the project is 10 percent, and the relevant tax rate is 35 percent. a. Using Excel, what is the base case NPV? Would you accept this project? b. Based on your experience, you think the unit sales, variable costs and fixed cost projections given here are probably accurate to within +/- 15 percent. Develop using Excel scenario manager, the best and worst scenarios. c. Use Excel data table to perform a sensitivity analysis to change in fixed cost. d. Using Excel, what will be the new base case NPV if equipment will be sold at the end of project for $500,000 and that there will be an initial investment in net working capital of $50,000 which will be recovered at the end of the project. 1. You are considering a start of a new product line. $800,000 4 years Project cost Project life Depreciation Feasibility study Sales units Price per unit Variable cost per unit Fixed costs straight-line to zero $10,000 $450 units per year $18,000 $15,400 $610,000 per year The required return on the project is 10 percent, and the relevant tax rate is 35 percent. a. Using Excel, what is the base case NPV? Would you accept this project? b. Based on your experience, you think the unit sales, variable costs and fixed cost projections given here are probably accurate to within +/- 15 percent. Develop using Excel scenario manager, the best and worst scenarios. c. Use Excel data table to perform a sensitivity analysis to change in fixed cost. d. Using Excel, what will be the new base case NPV if equipment will be sold at the end of project for $500,000 and that there will be an initial investment in net working capital of $50,000 which will be recovered at the end of the projectStep by Step Solution
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