Projections given for price-quantity-variable costs

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We are evaluating a project that costs $1,422,000, 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 88,200 units per year. Price per unit is $34.85, variable cost per unit is $21.10, and fixed costs are $762,000 per year. The tax rate is 35 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-cases and worst-case NPV figures.

NPV

Best-case: $

Worst-case: $

Reference no: EM131568648

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