The initial cost of the project is $160,000 and it has a 5-year life, with a salvage value of zero. Depreciation is straight-line; the required return is 12% and the tax rate is 30%.

Base Case Lower Bound Upper Bound

Unit Sales 5,000 5,500 6,000

Price/unit $ 80 $ 77 $ 85

Var. cost/unit $ 60 $ 57 $ 65

Fixed cost/year $ 50,000 $ 46,000 $60,000

EBIT for the worst case is: