Question: We are evaluating a project that costs $ 9 8 3 , 0 0 0 , has a life of eleven years, and has no

We are evaluating a project that costs $983,000, has a life of eleven years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 141,000 units per year. Price per unit is $39, variable cost per unit is $28, and fixed costs are $993,813 per year. The tax rate is 23 percent, and we require a return of 15 percenton this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-18 percent. a. Calculate the best-case NPV. b. Calculate the worst-case NPV.

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