Question: Problem 9-2 Scenario Analysis We are evaluating a project that costs $670,000, has a tive-year life, and has no salvage value. Assume that depreciation is
Problem 9-2 Scenario Analysis We are evaluating a project that costs $670,000, has a tive-year life, and has no salvage value. Assume that depreciation is straight- line to zero over the life of the project. Sales are projected at 59,000 units per year. Price per unit is $44 varlable cost per unit is $24 and fixed costs are $760,000 per year. The tax rate is 35 percent, and we requtre a return of 18 percent on this project. Suppose the projections given for pnce, quantity, variable costs, and fixed costs are all accurate to within 10 percent Calculate the best-case and worst-case NPV tigures. (A negetive enswer should be indicated by a minus sign. Do not round Intermediete colculetions and round your answers to 2 decimal places e.9 3316 NPV Best-case Worst-case Next ?M
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