Question: We are evaluating a project that costs $ 7 4 5 , 0 0 0 , has a life of fourteen years, and has no

We are evaluating a project that costs $745,000, has a life of fourteen years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 98,000 units per year. Price per unit is $45, variable cost per unit is $24, and fixed costs are $750,960 per year. The tax rate is 24 percent, and we require a return of 19 percent on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-12 percent.
a. Calculate the best-case NPV.
b. Calculate the worst-case NPV.

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