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You are responsible for evaluating the new investment project. The cost of the project is $ 500,000 and will have a lifespan of 5 years.
You are responsible for evaluating the new investment project. The cost of the project is $ 500,000 and will have a lifespan of 5 years. Damping is linear up to a zero value. The unit variable costs are $ 10,000 and the fixed costs are $ 400,000. It is planned to sell 1000 units at $ 15,000 per unit. The minimum return payable is 10% and the tax rate is 34%. Based on your expertise, you assume that the projections for number of units sold, variable costs and fixed costs are probably correct within +/- 15%, what is the NPV in basic assumptions and at best and the worst case scenario? Question 6 options: VAN basic assumption: $ 10,820,200.99 Worst case NPV: $ 2,541,122.69 Van best scenario: $ 22,257,467.84
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