Projections given for price-quantity-variable costs

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We are evaluating a project that costs $1018071, has a seven-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 42390 units per year. Price per unit is $48, variable cost per unit is $22, and fixed costs are $837114 per year. The tax rate is 38 percent, and we require a 9 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-8 percent. What is the NPV of the project in worst-case scenario?

Reference no: EM13937451

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