Calculate the best-case and worst-case npv figures

Assignment Help Financial Management

Reference no: EM131875336

We are evaluating a project that costs $680,000, has a five-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 49,000 units per year. Price per unit is $46, variable cost per unit is $26, and fixed costs are $685,000 per year. The tax rate is 35 percent, and we require a return of 20 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. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

NPV

Best-case $

Worst-case $

Reference no: EM131875336

Questions Cloud

Current effects on cash flows and transaction exposure : Current effects on cash flows: How should appreciation of a firm's home currency generally affect its cash inflows? Transaction exposure.

What contingency planning could be done to avert the impact : Identify major problems that could prevent your accomplishment of your objective? What contingency planning could be done to avert or minimize their impact?

What reasons are there for a biotech startup : During the first year or two of its existence, what reasons are there for a biotech startup to engage in any sort of strategic planning?

How much of service department costs allocated to machining : How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22?

Calculate the best-case and worst-case npv figures : We are evaluating a project that costs $680,000, has a five-year life, and has no salvage value. Calculate the best-case and worst-case NPV figures.

Draft the documents to create the compact : The genesis of the idea for an interstate compact through the passage of the legislation in two or more states and the implementation is a multiple-step process

What are general mills corporate-level strategies : What are General Mills' corporate-level strategies? What generic Porter strategy does the company follow? Are General Mills' strategic choices aligned.

Requires initial fixed asset investment : Summer Tyme, Inc., is considering new 3-year expansion project that requires initial fixed asset investment of $4.428 million.

What is the major problem in the given case : The nurses at Garrison argue that pediatric hospitals and intensive care units, in particular, are different from adult hospitals and that these differences.

User Account

All Pages