Effect on project npv, What is the effect on project NPV,

Effect on project npv

Reference no: EM13754685

A project currently generates sales of $11.5 million, variable costs equal to 40% of sales, and fixed costs of $3.4 million. The firm's tax rate is 40%.

The project will last for 10 years. The discount rate is 12%.

a-1. What is the effect on project NPV, if sales increase from $11.5 million to $13.5 million?

a-2. What is the effect on project NPV, if variable costs increase to 60% of sales?

b. If project NPV under the base-case scenario is $3.4 million, how much can fixed costs increase before NPV turns negative?

c. How much can fixed costs increase before accounting profits turn negative?

Reference no: EM13754685

Questions Cloud

What will the permissions string contain : If you execute ls -ld on the project38" directory, what will the permissions string contain? If you execute ls -l on the iapp_v_8 file contained in project38 , what will the permissions string contain

What tool of monetary policy will the federal reserve : What tool of monetary policy will the Federal Reserve use to increase the federal funds rate from 1% to 1.25% - If the Federal Reserve increases the required reserves, financial institutions will likely lend out

Question regarding the money management : Most money managers have a portion of their compensation tied to the performance of the portfolios they manage. Explain how this arrangement can create an ethical dilemma for the manager and suggest a way to ensure ethical behavior.

Symptoms of post traumatic stress disorder : What are the diagnostic criteria for and symptoms of Post Traumatic Stress Disorder (PTSD). How do people's perceptions and coping strategies play a role in the development of this disorder? Who is at risk for PTSD?

Effect on project npv : What is the effect on project NPV, if sales increase from $11.5 million to $13.5 million?

Where did the usa first attack the nazis and italians : Where did the USA first attack the nazis and Italians?

Various possible meanings of the term spirituality : Write an 800-1,000-word essay on your personal worldview. Briefly discuss the various possible meanings of the term "spirituality," and your understanding of the concepts of pluralism, scientism, and postmodernism. Primarily, address the following se..

What should happen to exchange rate between dollar peso : Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings and A third degree price discrimination can be applied to which of the following market structures?

Write a review that analysis on christ carrying the cross : Write a review that analysis on Christ carrying the Cross. It has mainly two parts. You have to describe the historical period it belings to and its features.

User Account

All Pages