Answer Happy

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, varlable 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 $ 1,694,223.77 Worst-case NPV $ -1,442,520.90