The Meldrum Co. is analyzing a proposed project. The company expects to sell 3,000 units, give or

take 15 percent. The expected variable cost per unit is $8 and the expected fixed costs are $12,500.

Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation

expense is $4,000. The sale price is estimated at $18 a unit, give or take 2 percent. The project

requires $24,000 of fixed assets which will be worthless when the project ends in six years. Also

required is $6,500 of net working capital for the life of the project. The tax rate is 34 percent and the

required rate of return is 12 percent. What is the net present value of the worst-case scenario?

A. $2,979.40

B. $4,008.16

C. $3,810.29

D. $6,705.72

E. $6,308.15