We are evaluating a project that costs $780,000, has a life of 5 years, and has no salvage value. Assume that depreciati

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We Are Evaluating A Project That Costs 780 000 Has A Life Of 5 Years And Has No Salvage Value Assume That Depreciati 1 (19.15 KiB) Viewed 11 times

We are evaluating a project that costs $780,000, has a life of 5 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 51,000 units per year. Price per unit is $55, variable cost per unit is $37, and fixed costs are $790,000 per year. The tax rate is 25 percent, and we require a return of 14 percent on this project. 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. (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.) Best-case NPV Worst-case NPV