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We are evaluating a project that costs $ 5 2 0 , 0 0 0 , has a life of 6 years, and has no

We are evaluating a project that costs $520,000, has a life of 6 years, and has no
salvage value. Assume that depreciation is straight-line to zero over the life of the
project. Sales are projected at 73,000 units per year. Price per unit is $45, variable cost
per unit is $30, and fixed costs are $840,000 per year. The tax rate is 21 percent, and we
require a return of 15 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. (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.)
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