Problem 9-21 Scenario Analysis (LO 3] We are evaluating a project that costs $2,250,000, has a 8-year life, and has no s

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Problem 9 21 Scenario Analysis Lo 3 We Are Evaluating A Project That Costs 2 250 000 Has A 8 Year Life And Has No S 1 (53.35 KiB) Viewed 39 times

Problem 9-21 Scenario Analysis (LO 3] We are evaluating a project that costs $2,250,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 94,900 units per year. Price per unit is $39.09, variable cost per unit is $24.15, and fixed costs are $872,000 per year. The tax rate is 24 percent and we require a return of 11 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