A) We are evaluating a project that costs $115571, has a seven-year life, and has no...

A) We are evaluating a project that costs $115571, has a seven-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 4293 units per year. Price per unit is $45, variable cost per unit is $25, and fixed costs are $81427 per year. The tax rate is 35 percent, and we require a 8 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-8 percent. What is the NPV of the project in best-case scenario? (Negative amount should be indicated by a minus sign. Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)

B)We are evaluating a project that costs $117027, has a seven-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 4144 units per year. Price per unit is $52, variable cost per unit is $28, and fixed costs are $82376 per year. The tax rate is 39 percent, and we require a 13 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-10 percent. What is the NPV of the project in worst-case scenario? (Negative amount should be indicated by a minus sign. Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)

Expert Solution

A)

jeff jeffy answered 1 year ago

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