Question: Wendy and Wayne are evaluating a project that requires an initial investment $843,000 in fixed assets. The project will last for fourteen years, and the
Wendy and Wayne are evaluating a project that requires an initial investment $843,000 in fixed assets. The project will last for fourteen years, and the assets have salvage value. Assume that depreciation is straight-line to zero over the life of project Sales are projected at 118,000 units per year. Price per unit is $45, variable cost per i is $24, and fixed costs are $852,273 per year. The tax rate is 37 percent, and required annual return on this project is 15 percent. The projections given for pr quantity, variable costs, and fixed costs are all accurate to within +/- 20 percent. Required: (a)Calculate the best-case NPV. (Do not round your intermediate calculations.) (Click to select) (b)Calculate the worst-case NPV. (Do not round your intermediate calculations.) (Click to select)
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