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You are considering a new product launch. The project will cost $970,000, have a 5 year life, and have no satvage value; depreciation is straight-line

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You are considering a new product launch. The project will cost $970,000, have a 5 year life, and have no satvage value; depreciation is straight-line to zero. Sales are projected at 360 units per year: price per unit will be $15,965, variable cost per unit will be $12,050, and fixed costs will be $630.000 per yeat. The required retum on the project is 11 percent, and the relevant tax rate is 24 percent. Based on your experlence, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within 10 percent. 0. What are the best-case and worst-case NPVs with these projections? Note: A negative onswer should be indicated by o minus sign. Do not round intermediate calculations and round your answers to 2 decimol places, e.g., 32.16. b. What is the base-case NPV? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.9., 32.16. c. What is the sensitivity of your base-ase NPV to changes in fixed costs? Note: A negotive answer should be indicoted by a minus sign. Do not round intermediate calculations and round your answer to 2 decimbl ploces, e.9., 32.16

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