Sensitivity of base-case npv to changes in fixed costs

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Reference no: EM131907308

You are considering a new product launch. The project will cost $1,700,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 140 units per year; price per unit will be $22,000, variable cost per unit will be $12,500, and fixed costs will be $490,000 per year. The required return on the project is 10 percent, and the relevant tax rate is 32 percent.

Evaluate the sensitivity of your base-case NPV to changes in fixed costs.

Reference no: EM131907308

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