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We are evaluating a project that costs $912,000, has an thirteen-year life, and has no salvage...

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Finance

We are evaluating a project that costs $912,000, has anthirteen-year life, and has no salvage value. Assume thatdepreciation is straight-line to zero over the life of the project.Sales are projected at 147,000 units per year. Price per unit is$36, variable cost per unit is $29, and fixed costs are $921,120per year. The tax rate is 33 percent, and we require a 18 percentreturn on this project. The projections given for price, quantity,variable costs, and fixed costs are all accurate to within +/- 14percent. (a) Calculate the best-case NPV. (b) Calculate theworst-case NPV.

Please use Excel and show formulas. Thanks.

Answer & Explanation Solved by verified expert
3.9 Ratings (425 Votes)
athe bestcase NPV is 14640520In bestcase NPV projections given for price quantityvariable costs and fixed costs will be    See Answer
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