Calculate the best-case and worst-case npv figures

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Reference no: EM131528483

We are evaluating a project that costs $924, 000, has a four-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, 600 units per year. Price per unit is $34.55, variable cost per un is $20.80, and fixed costs are $756, 000 per year. The tax rate is 35 percent, and we require a return of 13 percent on this project.

Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within plusminus 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.)

Reference no: EM131528483

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