Calculate the best-case and worst-case npv

Assignment Help Finance Basics
Reference no: EM13684247

We are evaluating a project that costs $800,000, 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 60,000 units per year. Price per unit is $40, variable cost per unit is $20, and fixed costs are $800,000 per year. The tax rate is 35 percent, and we require a return of 10 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.

Calculate the best-case and worst-case NPV figures. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)

NPV
Best-case $

Worst-case $

Reference no: EM13684247

Questions Cloud

What are the major arguments made by credit : What are the major arguments made by credit and marketing professionals for the extension of trade credit?
A choice between depreciation methods : A choice between depreciation methods, whose advice should you follow?
What is the npv of the project : What is the NPV of the project?
Use the geometric average growth rate : Use the geometric average growth rate?
Calculate the best-case and worst-case npv : Calculate the best-case and worst-case NP
Working capital management : Working Capital Management
Having a lot of trouble with a practice exam : Having a lot of trouble with a practice exam for my Finance class.
Reading published financial statements : Reading Published Financial Statements
Find the value of vbb at the transition : Calculate IB and IE for 0

Reviews

Write a Review

Finance Basics Questions & Answers

  Gallagher corporation anticipates a 6 dividend per share

gallagher corporation anticipates a 6 dividend per share for the year. its minimum rate of return is 12 percent. the

  Ranny inc has sales of 14900 costs of 5800 depreciation

ranny inc. has sales of 14900 costs of 5800 depreciation expense of 1300 and interest expense of 780. if the tax rate

  Finance area of a company

You are an individual within the finance area of your company, and you are preparing final budgets to present to your board of directors for the coming year.

  Youre considering the start of a small business that sells

you are considering the start of a small business that sells generator gaskets. according to your market research you

  Alpha stock has a beta of 123 its required return is 1175

alpha stock has a beta of 1.23 its required return is 11.75 and the risk-free rate is4.30. what is the required rate of

  Question related to risk

Suppose you have a friend who is always getting into trouble by taking unwise risks. What advice, based on what you have learned in this course, would you give this person?

  A companys fixed operating costs are 480000 its variable

a companys fixed operating costs are 480000 its variable costs are 3.85 per unit and the products sales price is 4.30.

  What is the maximum revenue

Solve the LPP obtained in (a) graphically by using iso-pro t lines in order to conclude how framer Jones could maximize the total revenue from wheat and corn. What is the maximum rev- enue?

  Lohn corporation is expected to pay the given dividends

lohn corporation is expected to pay the following dividends over the next four years 19 15 14 and 5.50. afterward the

  Find the immediate dilution based on new corporate share

Macho Tool Corporation is going public at $50 net per share to the company. There also are founding stockholders that are selling part of their shares at similar value.

  Which of the following items are classified as assets on a

which of the following items are classified as assets on a typical balance sheet?a. depreciation.c. cash.b. ceo

  What happens to the supply and demand for money and the

what happens to the supply and demand for money and the price interest rates and the quantity of money if there is make

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd