Question

We are evaluating a project that costs $739,000, has an nine-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 110,000 units per year. Price per unit is $41, variable cost per unit is $21, and fixed costs are $741,956 per year. The tax rate is 38 percent, and we require a 13 percent return on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 14 percent.

  

Required:
(a)	Calculate the best-case NPV. (Do not round your intermediate calculations.)
	(Click to select) $8,172,634, $8,833,610, $5,826,656, $9,275,291, $8,391,930

   

(b)	Calculate the worst-case NPV. (Do not round your intermediate calculations.)
	(Click to select )$477,856, $137,119, $5,826,656, $2,247,630, $9,275,291

Answer 1