Question: please help don't have much time will upvote answer! multiple choice question You are responsible for evaluating the new investment project. The cost of the
please help don't have much time will upvote answer! multiple choice question
You are responsible for evaluating the new investment project. The cost of the project is $ 500,000 and will have a lifespan of 5 years. Damping is linear up to a zero value. The unit variable costs are $ 10,000 and the fixed costs are $ 400,000. It is planned to sell 1000 units at $ 15,000 per unit. The minimum return payable is 10% and the tax rate is 34%. Based on your expertise, you assume that the projections for number of units sold, variable costs and fixed costs are probably correct within +/- 15%, what is the NPV in basic assumptions and at best and the worst case scenario?
a)VAN basic assumption:
$ 10,820,200.99
Worst case NPV:
$ 2,541,122.69
Van best scenario:
$ 22,257,467.84
b)VAN basic assumption:
$ 10,820,200.99
Worst case NPV:
$ 5,682,737.22
Van best scenario:
$ 16,194,684.87
c)None of the above.
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