Question: We are evaluating a project that costs $1,920,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straightline to
We are evaluating a project that costs $1,920,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straightline to zero over the life of the project. Sales are projected at 94,500 units per year. Price per unit is $38.43, variable cost per unit is $23.60, and fixed costs are $839,000 per year. The tax rate is 23 percent, and we require a return of 12 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within \pm 10 percent. Calculate the best-case and worst-case NPV figures. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16
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