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We are evaluating a project that costs $899,000, has a life of eight years, and has no salvage value. Assume that depreciation is straight-line to

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We are evaluating a project that costs $899,000, has a life of eight years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 131,000 units per year. Price per unit is $40, variable cost per unit is $22, and fixed costs are $915,182 per year. The tax rate is 25 percent, and we require a return of 21 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/15 percent. a. Calculate the best-case NPV. b. Calculate the worst-case NPV. Consider a project with a life of 5 years with the following information: initial fixed asset investment =$300,000; straight-line depreciation to zero over the 5-year life; zero salvage value; price =$38; variable costs =$17; fixed costs =$105,000; quantity sold = 68,250 units; tax rate =21 percent. How sensitive is OCF to changes in quantity sold? Multiple Choice $16.59 $11.78 $21.40 $18.91 $0.06

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