1,500 correct

6. Use the following base-case information to work the self- test problems: A project under consideration costs $750,000, has a five- year life, and has no salvage value. Depreciation is straight-line to zero. The required return is 17 percent, and the tax rate is 34 percent. Sales are projected at 500 units per year. Price per unit is $2500, variable cost per unit is $15, 00, and fixed costs are $200,000 per year. Suppose you think that the unit sales, price, variable cost, and fixed cost projections given here are accurate to within 5 percent. What is are the upper and lower bounds for these projections? What is the base-case NPV? What are the best and worst-case scenario NPVs