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  3. 3. a project costs $450,000. it has a 10-year usef

3. A project costs $450,000. It has a 10-year useful life and no salvage value....

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Accounting

3. A project costs $450,000. It has a 10-year useful life and no salvage value. Depreciation is straight-line to zero over the life of the project. The tax rate is 34% and the required return for the project is 14%(assume no debt). You have the following estimates for the base-case and you believe the estimates are accurate to +/-15%:Unit sales: 2,000Price/unit: 350VC/unit: 230FC/year: 50,000
Calculate the worst-case NPV.
4. A project costs $450,000. It has a 10-year useful life and no salvage value. Depreciation is straight-line to zero over the life of the project. The tax rate is 34% and the required return for the project is 14%(assume no debt). You have the following estimates for the base-case and you believe the estimates are accurate to +/-15%:Unit sales: 2,000Price/unit: 350VC/unit: 230FC/year: 50,000
The base-case NPV is 283,907.4714. Calculate the sensitivity of the projects NPV to changes in unit sales.

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