Depreciation is straight-line to zero over life of project

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Reference no: EM13937320

We are evaluating a project that costs $1166235, has a 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 43501 units per year. Price per unit is $53, variable cost per unit is $24, and fixed costs are $806599 per year. The tax rate is 37 percent, and we require a 12 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-11 percent. What is the NPV of the project in worst-case scenario?

Reference no: EM13937320

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