You are considering starting a new factory producing small electric heaters. Each unit will sell at a price of $65. The production cost of each heater is $50. The fixed cost of production is $40000. You are expecting to sell 8200 units per year. This project has an economic life of 7 years. The project requires an investment of $285000 in plants and equipment. This equipment will be depreciated using a straight line depreciation method to a salvage value of zero. The required rate of return for the project is 14 percent. The marginal corporate tax rate is 22 percent. Do a sensitivity analysis using different sales prices per unit. Assume that the sales price can be between $81.25 and $58.5. What is the maximum net present value based on the range of the sales price per unit?

305316

691022

476741

31036