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  3. you have a project with the following base assumpt

You have a project with the following base assumptions: \begin{tabular}{|l|l|l|} \hline Expected sales: 30,000 units...

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You have a project with the following base assumptions: \begin{tabular}{|l|l|l|} \hline Expected sales: 30,000 units per year & Initial Investment: $1M \\ \hline Unit price: $50 & Depreciation is straight line. \\ \hline Variable cost: $30 & No salvage value \\ \hline Fixed cost: $300,000 & Tax rate is 30% \\ \hline Project life: 10 years & Hurdle rate is 12% \\ \hline \end{tabular} There is a bad case scenario where the unit price is only $40. If this happens fixed costs will only be $200,000. Variable costs will fall in proportion to unit price. What is the project NPV if all variables are as expected? What is the NPV in the bad case scenario

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