Question: P11-6 Scenario Analysis (LO2] We are evaluating a project that costs $982,000, has a life of thirteen years, and has no salvage value. Assume that

 P11-6 Scenario Analysis (LO2] We are evaluating a project that costs
$982,000, has a life of thirteen years, and has no salvage value.

P11-6 Scenario Analysis (LO2] We are evaluating a project that costs $982,000, has a life of thirteen years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 143,000 units per year. Price per unit is $35, variable cost per unit is $23, and fixed costs are $988,874 per year. The tax rate is 24 percent, and we require a return of 20 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 21 percent. a. Calculate the best-case NPV. $ 3,633,091 $10,821,767 $ 9,391,032 $ 3,633,091 $11,362,855 $10,280,679 w b. Calculate the worst-case NPV. $-5,091,752 $-3,661,018 $ 98,299 $ 3,633,091 $11,362,855

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