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The management team of a company are determining the sensitivity analysis of a project. In the first scenario, the project has the following information: depreciation
The management team of a company are determining the sensitivity analysis of a project. In the first scenario, the project has the following information: depreciation life - 10. project cost-$2,000,000; unit sales = 50,000 unit Price = $300, unit variable cost-$210;fixed costs $400,000, tax rate 34%; rate of return = 10%. In the second scenario, it was determined that if the price falls to $285 per unit, then sales will increase to 75,000 units, while all other variables would remain the same Given this information, determine the NPV of both scenarios Multiple Choice First scenario NPV-$1705 million second scenario NPV - 51761 milion First scenario NPV = $15.05 million second scenero NPV = $19.6 million First scenario NP $13.05 milio, second scenario NPV - $2161 million First scenario NPV = $19.05 million second scenario NPV 51561 million First scenario NPV - 52105 million second scenario NPV 51361 million
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