Evaluate the sensitivity of your base-case npv to increase

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Reference no: EM131826413

You are considering a new product launch. The project will cost $1,400,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 180 units per year; price per unit will be $16,000, variable cost per unit will be $9,800, and fixed costs will be $430,000 per year. The required return on the project is 12 percent, and the relevant tax rate is 35 percent. Evaluate the sensitivity of your base-case NPV to an increase in fixed costs by $10,000?

Reference no: EM131826413

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