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.

Expert Solution

jeff jeffy answered 2 years ago

We are evaluating a project that costs $972,000, has a 4 year life, and no salvage...

We are evaluating a project that costs $972,000, has a 4 year life, and no salvage value. Assume that depreciation is staright-line to zero over the life of the project. Sales are projected at 88,000 units per year. Price per unit is $35.15, variable cost per unit is $21.40 and fixed costs are $768,000 per year. The tax rate is 35 percent and we require a return of 13 percent on this project. A) Calculate the best case operating cash...

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We are evaluating a project that costs $500,000, has an eight-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 50,000 units per year. Price per unit is $40, variable cost per unit is $25, and fixed costs are $600,000 per year. The tax rate is 22 percent, and we require a return of 12 percent on this project. Suppose the projections given for price, quantity,...

We are evaluating a project that costs $1,080,000, has a ten-year life, and has no salvage...

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We are evaluating a project that costs $841,992, has an eight-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 60,261 units per year. Price per unit is $44, variable cost per unit is $19, and fixed costs are $420,392 per year. The tax rate is 35%, and we require a return of 20% on this project. Calculate the Accounting Break-Even Point. (Round answer to 0...

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