Question: Please solve it in .docx format and as quickly as possible. Thank you! a a 6. You are considering a new product launch. The project

 Please solve it in .docx format and as quickly as possible.

Please solve it in .docx format and as quickly as possible. Thank you!

a a 6. You are considering a new product launch. The project will cost $1,950,000, have a four-year life, and have a market salvage value of $20,000; depreciation is straight-line to zero. Sales are projected at 210 units per year; price per unit will be $17,500, variable cost per unit will be $10,600, and fixed costs will be $560,000 per year. The required return on the project is 12%, and the relevant tax rate is 21%. a. Based on your experience, you think the unit sales, variable cost, and fixed cost projects given here are probably accurate to within 10% . What are the upper and lower bounds for these projections? What is the base-case NPV? What are NPVs for the best-case and worst-case scenarios? b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs (i.e. ANPV/AFC)

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