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Your sales and cost accounting team have come up with upper and lower bound estimates for sales, prices and costs as shown in the table

Your sales and cost accounting team have come up with upper and lower bound estimates for sales, prices and costs as shown in the table below. You are considering a project that requires an initial investment of $10,000. t is depreciable over four years using the straight line depreciation. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs.

Base Case Lower Bound Upper bound
Unit Sale 3,000 2,750 3,250
Price/unit $14 $13 $16
Variable cost/unit $9 $8 $10
Fixed costs $9,000 $8,500 $10,000

a)What is the base NPV for the project

b)What is the worst case NPV for the project

c)What is the best case NPV for the project

d)What is the best case accounting break-even?

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