Question
We are evaluating a project that costs $857,000, has a 7-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $857,000, has a 7-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 82,000 units per year. Price per unit is $40, variable cost per unit is $21, and fixed costs are $868,141 per year. The tax rate is 38 percent, and we require a 19 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-16 percent. |
Required:
Calculate the best-case and worst-case NPV figures. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) |
NPV | |
Best-case _______________ | $ |
Worst-case _______________ | $ |
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