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We are evaluating a project that cost $500,000, has a eight year life, and has no salvage value. Assume that depreciation is straight-line to zero
We are evaluating a project that cost $500,000, has a eight year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 50,000 units per year. price per unit is $40, variable cost per unit is $25 and fixed costs are $600,000 per year. The tax rate is 35 percent, and we require a 12 percent return on this project. suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +_10 percent. Calculate the best and worst case NPV figure.
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