Question
We are evaluating a project that costs $118031, has a seven-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $118031, has a seven-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 4104 units per year. Price per unit is $47, variable cost per unit is $28, and fixed costs are $83924 per year. The tax rate is 33 percent, and we require a 11 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-10 percent.What is the NPV of the project in best-case scenario?
We are evaluating a project that costs $118149, has a seven-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 4242 units per year. Price per unit is $50, variable cost per unit is $26, and fixed costs are $81237 per year. The tax rate is 31 percent, and we require a 8 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-8 percent. What is the NPV of the project in worst-case scenario?
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