Question

We are evaluating a project that costs $1,980,000, has a life of 7 years, and has no salvage value. Assume that depreciation is straight- line to zero over the life of the project. Sales are projected at 89,100 units per year. Price per unit is $38.55, variable cost per unit is $23.70, and fixed costs are $845,000 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, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the best-case and worst-case NPV figures. Note: 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. Best-case Worst-case OCF NPV

          We are evaluating a project that costs $1,980,000, has a life of 7 years, and has no salvage value. Assume that depreciation is straight-
line to zero over the life of the project. Sales are projected at 89,100 units per year. Price per unit is $38.55, variable cost per unit is
$23.70, and fixed costs are $845,000 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, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the
best-case and worst-case NPV figures.
Note: 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.
Best-case
Worst-case
OCF
NPV

we are evaluating a project that costs 1980000 has a life of 7 years and has no salvage value assume that depreciation is straight line to zero over the life of the project sales are project 42634

Added by April L.

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