We are evaluating a project that costs $848,000, has an eight-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 48,000 units per year. Price per unit is $40, variable cost per unit is $20, and fixed costs are $625,000 per year. The tax rate is 35 percent, and we require a return of 20 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.

We are evaluating a project that costs $1077686, has aseven-year life, and has no salvage value. Assume that depreciationis straight-line to zero over the life of the project. Sales areprojected at 41111 units per year. Price per unit is $47, variablecost per unit is $21, and fixed costs are $821986 per year. The taxrate is 38 percent, and we require a 11 percent return on thisproject. Suppose the projections given for price, quantity,variable costs, and fixed costs are all accurate to within +/-8percent. What is the NPV of the project in worst-case scenario?(Negative amount should be indicated by a minus sign. Round yourfinal answer to the nearest dollar amount. Omit the "$" sign andcommas in your response. For example, $123,456.78 should be enteredas 123457.)

We are evaluating a project that costs $1024344, has aseven-year life, and has no salvage value. Assume that depreciationis straight-line to zero over the life of the project. Sales areprojected at 42145 units per year. Price per unit is $54, variablecost per unit is $20, and fixed costs are $817419 per year. The taxrate is 34 percent, and we require a 13 percent return on thisproject. Suppose the projections given for price, quantity,variable costs, and fixed costs are all accurate to within +/-7percent. What is the NPV of the project in best-case scenario?(Negative amount should be indicated by a minus sign. Roundyour final answer to the nearest dollar amount. Omit the "$" signand commas in your response. For example, $123,456.78 should beentered as 123457.)

The project will cost $990,000, have a four-year life, and haveno salvage value; depreciation is straight-line to zero. Sales areprojected at 320 units per year; price per unit will be $19,400,variable cost per unit will be $15,900, and fixed costs will be$330,000 per year. The required return on the project is 14percent, and the relevant tax rate is 30 percent. Requirement 1:Based on your experience, you think the unit sales, variable cost,and fixed cost projections given here are probably accurate towithin ±10 percent. (a) What are the best and worst case NPVs withthese projections?