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You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphite like material in its tennis rackets. The company

You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphite like material in its tennis rackets. The company has estimated the information in the following table about the market for a racket with the new material. The company expects to sell the racket for six years. The equipment required for the project has no salvage value. The required return for projects of this type is 13 percent, and the company has a 40 percent tax rate.

Pessimistic Expected Optimistic
Market size 111,000 126,000 151,000
Market share 20 % 23 % 25 %
Selling price $156 $161 $167
Variable costs per unit $110 $105 $104
Fixed costs per year $971,000 $926,000 $896,000
Initial investment $1,938,000 $1,836,000 $1,734,000
Calculate the NPV for each case for this project. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Pessimistic $
Expected $
Optimistic $

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