Calculate the best case and worst case npv figures

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We are evaluating a project that costs $1,398,000, has a six-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 87,800 units per year. Price per unit is $34.65, variable cost per unit is $20.90, and fixed costs are $758,000 per year. The tax rate is 40 percent, and we require a return of 11 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.

(A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)


NPV
Best-case $
Worst-case $


Reference no: EM131299744

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