Question
We are evaluating a project that costs $1,422,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $1,422,000, has a six-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 88,200 units per year. Price per unit is $34.85, variable cost per unit is $21.10, and fixed costs are $762,000 per year. The tax rate is 35 percent, and we require a return of 11 percent on this project.
I need to know the best case, and worst case NPV.. Thanks!
Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within 10 percent. Calculate the best-case and worst-case NPV figures.(A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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