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We are evaluating a project that costs $710,000, has a life of nine years, and has...

We are evaluating a project that costs $710,000, has a life of nine years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 122,000 units per year. Price per unit is $43, variable cost per unit is $21, and fixed costs are $714,970 per year. The tax rate is 24 percent, and we require a return of 13 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 12 percent.

  

a. Calculate the best-case NPV.

  

b. Calculate the worst-case NPV.

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jeff jeffy answered 1 year ago
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