Calculate the best-case and worst-case npv figures

Assignment Help Finance Basics

Reference no: EM13258835

We are evaluating a project that costs $768,000, 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 57,000 units per year. Price per unit is $60, variable cost per unit is $35, and fixed costs are $770,000 per year. The tax rate is 35 percent, and we require a 15 percent return 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.

Reference no: EM13258835

Questions Cloud

Annual straight-line depreciation : A building acquired at the beginning of the year at a cost of $316.000 has an estimated residual value of $48,000 and an estimated useful life of 40years. Determine (a) the depreciable cost, (b) the straight-line rate, and (c) the annual straight-..

Compute the ph of pure water at the temperature : In biological and medical applications, it is often necessary to study the autoionization of water at 37 degrees centigrade instead of 25 degrees centigrade. given that Kw for water is 2.5 X 10^-14 at 37 degrees centigrade, calculate the pH of pur..

What is time required for capacitor voltage for state value : A capacitor in an RC circuit with R = 5.00 W and C = 6.00 mF is being charged. What is the time required for the capacitor voltage to reach 86.5 percent of its steady-state value

What are the underwater angles of refraction : the index of refraction for red light in water is 1.331 and that for blue light is 1.340. what are the underwater angles of refraction for the blue and red components of the light

Calculate the best-case and worst-case npv figures : Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.

Discuss how supply and demand would be affected : Discuss how supply and demand would be affected under each of the four degrees of competition(pure competition,monopolistic competition,oligopoly,and monopoly). give specfic examples to support your response.

Explain the assignment model and how it facilitates : Explain the assignment model and how it facilitates in solving transportation problems. What benefits would be gained from using this model?

What are the benefits of virtualization of servers : What are the benefits of virtualization of servers? Short answer - Need at least 4 benefits. Also define a virtual server and how does social engineering work? What kind of information do they use to prepare?

What is the total return to billy from owning the stock : Billy purchased a stock for $45 one year ago. The stock is now worth $65. During the year, the stock paid a dividend of $2.50. What is the total return to Billy from owning the stock?

User Account

All Pages