Q$4.$

Scenario Analysis: What is the NPV for the a project under the following scenario?

Assume the project is a new project.

Equipment cost

$$4,250$

Salvage Value $($yr $4)$

$$300$

Opportunity cost

$$0$

Externalities $($cannibalization$)$

$$0$

Units sold, Year $1$

$412$

Annual change in units sold, after Year $1$

$-6\mathrm{.}00\%$

Sales price per unit, Year $1$

$$8\mathrm{.}70$

Annual change in sales price, after Year $1$

$2\mathrm{.}00\%$

Variable cost per unit $($VC$),$ Year $1$

$$7\mathrm{.}50$

Annual change in VC$,$ after Year $1$

$2\mathrm{.}00\%$Variable cost per unit $($VC$),$ Year $1$

$$7\mathrm{.}50$

Annual change in VC$,$ after Year $1$

$2\mathrm{.}00\%$

Nonvariable cost $($Non$-$VC$),$ Year $1$

$$2,500$

Annual change in Non$-$VC$,$ after Year $1$

$2\mathrm{.}00\%$

Project WACC

$10\mathrm{.}00\%$

Tax rate

$50\mathrm{.}00\%$

Working capital as $\%$ of next year's sales

$12\mathrm{.}65\%$

O $$13,379$

O $$5,847$

O$-$$$5,847$

O$$13,379$