Question
We are evaluating a project that costs $807,000, has a life of nine years, and has no salvage value. assume that depreciation is straight-line to
We are evaluating a project that costs $807,000, has a life of nine years, and has no salvage value. assume that depreciation is straight-line to zero over the life of the project. sales are projected at 145,000 units per year. price per unit is $42, variable cost per unit is $23, and fixed costs are $817,491 per year. the tax rate is 23 percent, and we require a return of 14 percent on this project. the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 14 percent. calculate the best-case NPV. Calculate the worst-case NPV.
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