Question

In: Finance

We are evaluating a project that costs $670,000, has a life of 5 years, and has...

We are evaluating a project that costs $670,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 59,000 units per year. Price per unit is $44, variable cost per unit is $25, and fixed costs are $760,000 per year. The tax rate is 23 percent, and we require a 16 percent return on this project. Suppose the projections given for the price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the best case and worst case NPV figures.

Solutions

Expert Solution

*Please rate Thumbs up

jeff jeffy answered 2 hours ago
Next > < Previous

Related Solutions

We are evaluating a project that costs $670,000, has a life of 5 years, and has...
We are evaluating a project that costs $670,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 59,000 units per year. Price per unit is $44, variable cost per unit is $24, and fixed costs are $760,000 per year. The tax rate is 23 percent and we require a return of 16 percent on this project. What is the sensitivity of...
We are evaluating a project that costs $670,000, has a five-year life, and has no salvage...
We are evaluating a project that costs $670,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 59,000 units per year. Price per unit is $44, variable cost per unit is $24, and fixed costs are $760,000 per year. The tax rate is 35 percent, and we require a return of 18 percent on this project A. Calculate the accounting break-even point (Units)...
We are evaluating a project that costs $650,000, has a life of 5 years, and has...
We are evaluating a project that costs $650,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 45,000 units per year. Price per unit is $56, variable cost per unit is $26, and fixed costs are $860,000 per year. The tax rate is 21 percent and we require a return of 14 percent on this project. a. Calculate the accounting break-even...
We are evaluating a project that costs $690,000, has a life of 5 years, and has...
We are evaluating a project that costs $690,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 51,000 units per year. Price per unit is $75, variable cost per unit is $50, and fixed costs are $790,000 per year. The tax rate is 25 percent and we require a return of 13 percent on this project. a. Calculate the accounting break-even...
We are evaluating a project that costs $660,000, has a life of 5 years, and has...
We are evaluating a project that costs $660,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 58,000 units per year. Price per unit is $57, variable cost per unit is $38, and fixed costs are $660,000 per year. The tax rate is 22 percent and we require a return of 16 percent on this project. Suppose the projections given for...
We are evaluating a project that costs $680,000, has a life of 5 years, and has...
We are evaluating a project that costs $680,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 64,000 units per year. Price per unit is $43, variable cost per unit is $26, and fixed costs are $685,000 per year. The tax rate is 24 percent and we require a return of 14 percent on this project. Suppose the projections given for...
We are evaluating a project that costs $972,000, has a life of twelve years, and has...
We are evaluating a project that costs $972,000, has a life of twelve years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 117,000 units per year. Price per unit is $35, variable cost per unit is $25, and fixed costs are $989,496 per year. The tax rate is 22 percent, and we require a return of 21 percent on this project. The projections given for price,...
We are evaluating a project that costs $743,000, has a life of eight years, and has...
We are evaluating a project that costs $743,000, has a life of eight years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 124,000 units per year. Price per unit is $37, variable cost per unit is $20, and fixed costs are $749,687 per year. The tax rate is 22 percent, and we require a return of 21 percent on this project. The projections given for price,...
We are evaluating a project that costs $1,100,000, has a life of 10 years, and has...
We are evaluating a project that costs $1,100,000, has a life of 10 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 47,000 units per year. Price per unit is $50, variable cost per unit is $25, and fixed costs are $820,000 per year. The tax rate is 21 percent and we require a return of 16 percent on this project. Suppose the projections given for...
We are evaluating a project that costs $1,080,000, has a life of 10 years, and has...
We are evaluating a project that costs $1,080,000, has a life of 10 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 52,000 units per year. Price per unit is $50, variable cost per unit is $30, and fixed costs are $730,000 per year. The tax rate is 25 percent and we require a return of 15 percent on this project. Suppose the projections given for...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT