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We are evaluating a project that costs $1,920,000, has a 6 year life, and no salvage...

We are evaluating a project that costs $1,920,000, has a 6 year life, and no salvage value. Assume that depreciation is staright-line to zero over the life of the project. Sales are projected at 94,000 units per year. Price per unit is $38.43, variable cost per unit is $23.60 and fixed costs are $839,000 per year. The tax rate is 23 percent and we require a return of 12 percent on this project.

Suppose the projections given for the price, quantity, variable costs, and fixed costs are all accurate within 10 percent. Calculate the best-case and worst-case NPV figures.

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