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You are considering a new product launch. The project will cost $ 1 , 6 7 5 , 0 0 0 , have a fouryear
You are considering a new product launch. The project will cost $ have a fouryear life, and have no salvage value; depreciation is straightline to zero. Sales are projected at units per year; price per unit will be $ variable cost per unit will be $ and fixed costs will be $ per year. The required return on the project is percent, and the relevant tax rate is percent.
a Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within percent. What are the upper and lower bounds for these projections? What is the basecase NPV What is the NPV for the bestcase and worstcase scenarios? A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your NPV answers to decimal places, eg Round your other answers to the nearest whole number, eg
tableScenarioUnit Sales,,Cost,,Costs,NPVBase$$BestWorst
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