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We are evaluating a project that costs $2,280,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight- line to
We are evaluating a project that costs $2,280,000, has a 8-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 98,300 units per year. Price per unit is $39.15, variable cost per unit is $24.20, and fixed costs are $875,000 per year. The tax rate is 25 percent and we require a return of 11 percent 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-case and worst-case NPV figures. Note: A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Best-case NPV Worst-case NPV
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