Calculate the best-case and worst-case npv figures

Reference no: EM131299649

We are evaluating a project that costs $1,398,000, has a six-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 87,800 units per year. Price per unit is $34.65, variable cost per unit is $20.90, and fixed costs are $758,000 per year. The tax rate is 40 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. Enter your answers in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	NPV
Best-case	$
Worst-case	$

Reference no: EM131299649

Questions Cloud

What are the implications for brand equity management : What are the implications for brand equity management for the brands in the category? How does it affect positioning, for example?

How would you evaluate the marketers response : Identify a fading brand. What suggestions can you offer to revitalize its brand equity? Try to apply the different approaches suggested.

Example about susan the sql programmer : Read the case example about Susan the SQL Programmer on page 6-1 of the Ethical Hacking and Countermeasures: Web Applications and Data Servers textbook.

Design a water treatment plant to treat this water source : CE 432 Introductions to Water and Wastewater Treatment Design Project. You are tasked to design a water treatment plant to treat this water source to an acceptable level so that it would be considered potable and palatable for human consumption

Calculate the best-case and worst-case npv figures : 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.

Five main points of risk assessment : Develop your introductory remarks to the teams, including five main points of risk assessment and five main points of incident response that you want to emphasize.

What is the history on ford motors company’s growth : Include a title page and 3-5 references. Please no reference from (Wikipedia). Please adhere to the Publication Manual of the American Psychological Association (APA), (6th ed., 2nd printing) when writing and submitting assignments and papers.

What is the net cash flow of the project each year : Assume that the tax rate is 35 percent and the required return on the project is 9 percent.- What is the net cash flow of the project each year?- What is the NPV of the project?

Comment code blocks in a bash source file : Write a bash script to comment code blocks in a bash source file. A bash comment is all characters from a # character (beginning a word) to the end of the line.

User Account

All Pages