Question

SCENARIO ANALYSIS: We are evaluating a project that costs $682000, has a five-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 47000 units per year. Price per unit is $46, variable cost per unit is $29, and fixed costs are $522000 per year. The tax rate is 30%, and we require a return of 15% on this project. Suppose the projections given for price, quantity sold, variable costs, and fixed costs are all accurate to within ±10 percent.

What is the Best Case NPV? (Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

What is the Worst Case NPV? (Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

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