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The most likely outcomes for a particular project are estimated as follows: Unit price Variable cost Fixed cost Expected sales $ $ NPV in the
The most likely outcomes for a particular project are estimated as follows: Unit price Variable cost Fixed cost Expected sales $ $ NPV in the "best case" scenario 57 30 $310,000 29,700 units per year However, you recognize that some of these estimates are subject to error. Suppose that each variable may turn out to be either 9% higher or 9% lower than the initial estimate. The project will last for 12 years and requires an initial investment of $1.2 million, which will be depreciated straight-line over the project life to a final value of zero. The firm's tax rate is 35% and the required rate of return is 10%. What is project NPV in the "best case" scenario, that is, assuming all variables take on the best possible value? (Round your answer to the nearest whole dollar amount.) $ 1761536 What about the "worst case" scenario? (Use the minus sign for negative values. Round your answer to the nearest whole dollar amount.) NPV in the "worst case" scopa
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