Question: Chapter 1 Example Project with a 4-year life and no salvage value will cost $960,000 initially. Depreciation is at a CCA rate of 20%. .

 Chapter 1 Example Project with a 4-year life and no salvage

Chapter 1 Example Project with a 4-year life and no salvage value will cost $960,000 initially. Depreciation is at a CCA rate of 20%. . Sales are projected at 240 units per year, Seenario Unit Sales Var.Cost Fixed Cost Price per unit is $25,000 Variable cost is $19,500 per unit Fixed cost is $830,000 Base Best Worst 216 240 264 19500 830000 7550 747000 21450 913000 k = 15%, T-35% . Assets will remain in the CCA class after the end of the project a) Based on your experience; unit sales, variable cost and fixed cost projections iven are probably accurate to within 10%. Calculate the upper and lower ounds. What are the NPVs for best and worst case scenarios? b) What is the sensitivity of NPV to changes in fixed cost

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