$16$

Problem $9-21$ Scenario Analysis $[$LO $3]$

$5\mathrm{.}26$

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We are evaluating a project that costs $$2,220,000,$ has a $8-$year life, and has no salvage value. Assume that depreciation is straightline to zero over the life of the project. Sales are projected at $94,700$ units per year. Price per unit is $$39\mathrm{.}03,$ variable cost per unit is $$24\mathrm{.}10,$ and fixed costs are $$869,000$ per year. The tax rate is $23$ percent and we require a return of $11$ 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$.,32\mathrm{.}16.$

$\backslash$table$[[$Best$-$case NPV$,],[$Worst$-$case NPV$,$dots..........................$]]$