Question: We are evaluating a project that costs $1,610,000, has a seven-year life, and has no salvage value. Assume that depreciation is straight-line to zero over

We are evaluating a project that costs $1,610,000, has a seven-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 87,500 units per year. Price per unit is $34.50, variable cost per unit is $20.75, and fixed costs are $755,000 per year. The tax rate is 40 percent, and we require a return of 12 percent on this project.

Required:

Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within 10 percent. Calculate the best-case and worst-case NPV figures. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)

NPV
Best-case $
Worst-case $

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