Tom is evaluating a project that costs $1,000,000, has a four-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 80,000 units per year, price per unit is $65, variable cost per unit is $25, and fixed costs are $2.5 million per year. The tax rate is 21%, and the required rate of return on the project is 10%.

Q8 Calculate the NPV for the project. (Round to 2 decimals)

Q9 Calculate the accounting break-even number of units for the project. (Round to 2 decimals)

Q10 Calculate the equivalent annual cost of the machine. (Round to 2 decimals)

Q11 Calculate the financial breakeven number of units for the project. (Round to 2 decimals)

Q12 Suppose the price, quantity, VC per unit, and FC projections are accurate within +/- 10%. Calculate the best case NPV. (Round 2 decimals)

Q 13 Suppose the price, quantity, VC per unit, and FC projections are accurate within +/- 10%. Calculate the worst-case NPV. (Round 2 decimals)