We are evaluating a project that costs $823,000, has an 14-year life, and has no

Question

We are evaluating a project that costs $823,000, has an 14-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 114,000 units per year. Price per unit is $42, variable cost per unit is $24, and fixed costs are $829,584 per year. The tax rate is 38 percent, and we require a 12 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-14 percent. The best-case NPV is $ ???and worst-case NPV is $ ???. (Do not include the dollar signs ($). Negative amount should be indicated by a minus sign. Round your answers to the nearest whole dollar amount. (e.g., 32).)

Explanation / Answer

answer = $984,613

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