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We are evaluating a project that costs $677,465, 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 $677,465, 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 42,757 units per year. Price per unit is $51, variable cost per unit is $27, and fixed costs are $527,778 per year. The tax rate is 30%, and we require a return of 21% 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 Best Case NPV?
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