Question: Q 1 0 . You are evaluating a project that costs $ 8 5 4 , 0 0 0 , has a 1 5 -

Q10. You are evaluating a project that costs $854,000, has a 15-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 154,000 units per year. Price per unit is $41, variable cost per unit is $20, and fixed costs are $865,102 per year. The tax rate is 33 percent, and the required return on this project is 12%. Suppose the projections given for price, quantity, variable costs, and fixed costs are accurate within \pm 15%. What is the NPV in the worst-case scenario? (15 points)

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