We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...

We are evaluating a project that costs $788,400, has a 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 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 percent, and we require a return of 12 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±15 percent.

Calculate the best-case and worst-case NPV figures. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Expert Solution

jeff jeffy answered 1 year ago

We are evaluating a project that costs $937,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $937,000, has a 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 115,000 units per year. Price per unit is $42, variable cost per unit is $23, and fixed costs are $947,307 per year. The tax rate is 38 percent, and we require a 12 percent return on this project. Requirement 1: Calculate the accounting break-even point.(Round your...

We are evaluating a project that costs $874,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $874,800, has a 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 85,000 units per year. Price per unit is $55, variable cost per unit is $39, and fixed costs are $765,000 per year. The tax rate is 24 percent, and we require a return of 11 percent on this project. Suppose the projections given for price, quantity,...

We are evaluating a project that costs $874,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $874,800, has a 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 85,000 units per year. Price per unit is $55, variable cost per unit is $39, and fixed costs are $765,000 per year. The tax rate is 24 percent, and we require a return of 11 percent on this project. a-1. Calculate the accounting break-even point. (Do...

We are evaluating a project that costs $926,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $926,000, has a 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 $22, and fixed costs are $930,630 per year. The tax rate is 36 percent, and we require a 16 percent return on this project. Requirement 1: Calculate the accounting break-even point.(Round your...

We are evaluating a project that costs $739,000, has an nine-year life, and has no salvage...

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,...

We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...

We are evaluating a project that costs $788,400, has a 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 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 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 $788,400, has a nine-year life, and has no salvage...

We are evaluating a project that costs $788,400, has a 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 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 percent, and we require a return of 12 percent on this project. a-1. Calculate the accounting break-even point....

We are evaluating a project that costs $856,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $856,800, has a 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 90,000 units per year. Price per unit is $56, variable cost per unit is $40, and fixed costs are $770,000 per year. The tax rate is 25 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 $964,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $964,000, has a 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 87,000 units per year. Price per unit is $43, variable cost per unit is $24, and fixed costs are $982,316 per year. The tax rate is 33 percent, and we require a 14 percent return on this project. Requirement 1: Calculate the accounting break-even point.(Round your...

We are evaluating a project that costs $856,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $856,800, has a 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 90,000 units per year. Price per unit is $56, variable cost per unit is $40, and fixed costs are $770,000 per year. The tax rate is 25 percent, and we require a return of 12 percent on this project . 2. What is the degree of...

Question

We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...

Solutions

Expert Solution

Related Solutions

We are evaluating a project that costs $937,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $874,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $874,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $926,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $739,000, has an nine-year life, and has no salvage...

We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...

We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...

We are evaluating a project that costs $856,800, has a nine-year life, and has no salvage...

We are evaluating a project that costs $964,000, has a nine-year life, and has no salvage...

We are evaluating a project that costs $856,800, has a nine-year life, and has no salvage...