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We are evaluating a project that costs $987,000, has a 9-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $987,000, has a 9-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 103750 units per year. Price per unit is $47, variable cost per unit is $39, and fixed costs are $921,000 per year. The tax rate is 37%, and we require a 12 % return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-14 percent. What is the worst-case NPV?
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