Calculate the worst-case npv

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Reference no: EM131929205

We are evaluating a project that costs $845,000, has an seven-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 145,000 units per year. Price per unit is $44, variable cost per unit is $24, and fixed costs are $857,675 per year. The tax rate is 38 percent, and we require a 16 percent return on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 12 percent.

(a) Calculate the best-case NPV. (Do not round your intermediate calculations.)

(b) Calculate the worst-case NPV. (Do not round your intermediate calculations.)

Reference no: EM131929205

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