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You are considering a new product launch. The project will cost $840,000, have a year life, and have no salvage value: depreciation is straight-line to

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You are considering a new product launch. The project will cost $840,000, have a year life, and have no salvage value: depreciation is straight-line to zero. Sales are projected at 500 units per year: price per unit will be $18,600, variable cost per unit will be $15,300, and fixed costs will be $860,000 per year. The required return on the project is 11 percent, and the relevant tax rate is 22 percent. a. The unit sales, variable cost, and fixed cost projections given above are probably accurate to within 10 percent. What are the upper and lower bounds for these projections? What is the base-case NPV? What are the best-case and worst-case scenarios? (A negative amount should be Indicated by a minus sign. Do not round Intermediate calculations and round your NPV answers to 2 decimal places, e.g.. 32.16.) Scenario Unit sales Variable cost per unit Fixed costs Upper bound 550 16,830 946,000 Lower bound 450 units S 13,770 774,000 Scenario Base-case 1.215 029 76 Best-case Worst case b. Calculate the sensitivity of your base-case NPV to changes in fixed costs. (A negative amount should be Indicated by a minus sign. Do not round Intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the accounting break-even level of output for this project? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) ANPVIAFC c. Accounting break-even units

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