What are the best and worst case npvs with these projections

Reference no: EM13273667

You are considering a new product launch. The project will cost $1,242,500, have a five-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 330 units per year; price per unit will be $19,500, variable cost per unit will be $16,000, and fixed costs will be $331,000 per year. The required return on the project is 15 percent, and the relevant tax rate is 40 percent.

Requirement 1:

Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within ±10 percent.

What are the best and worst case NPVs with these projections?

Reference no: EM13273667

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