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We are evaluating a project that costs $ 9 5 5 , 0 0 0 , has a life of eight years, and has no

We are evaluating a project that costs $955,000, 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 101,000 units per year. Price per unit is $42, variable cost per unit is $21, and fixed costs are $965,505 per year. The tax rate is 22 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 +/-16 percent.
a. Calculate the best-case NPV.
b. Calculate the worst-case NPV.

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