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Business, 24.09.2020 22:01 katielloyd

We are evaluating a project that costs $786,000, has an eight-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 65,000 units per year. Price per unit is $48, variable cost per unit is $25, and fixed costs are $725,000 per year. The tax rate is 22 percent, and we require a return of 10% on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10%. Calculate the best-case and worst-case NPV figures.

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We are evaluating a project that costs $786,000, has an eight-year life, and has no salvage value. A...
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