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We are evaluating a project that costs $1,140,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over

We are evaluating a project that costs $1,140,000, has a five-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 87,300 units per year. Price per unit is $34.40, variable cost per unit is $20.65, and fixed costs are $753,000 per year. The tax rate is 35 percent, and we require a return of 10 percent on this project.

Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within 10 percent.

REQUIRED: Calculate the best-case and worst-case NPV figures.

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