Assignment: Complete the following problems. You must show your work on the math problems to get full credit. Every student is responsible for completing their own responses to the following problems.

1. Eastern Engineering has the following base-case estimates for a new small engine assembly project:

Capital Investment = $15,000,000 Fixed Costs = $3,250,000 Variable Costs = $600 per unit Price per Unit = $1,000 Demand = 20,000 units per year Service Life = 12 years Salvage Value = $500,000 MARR = 20%

Tax rate=0%

A) Find the net present worth, equivalent annual worth, and rate of return of this base-case scenario. B) If demand for Eastern Engineerings small engines were to be 17,000 instead of 20,000, how would the net present worth, equivalent annual worth, and rate of return compare to the base-case scenario? What if the demand was 23,000? C) If the fixed costs were to be 20% lower, how would it affect the net present worth, equivalent annual worth, and rate of return of the project? What if the fixed costs were 20% higher? D) If the variable costs were to be 15% lower, how would it affect the net present worth, equivalent annual worth, and rate of return of the project? What if the variable costs were 15% higher?