Reference no: EM132961175
Question - A proposed new investment has projected sales of $600,000, Variable Costs are 40% of sales, and Fixed Costs are $180,000, depreciation is $54,000. Prepare a Pro-forma income statement assuming a tax rate of .34%. What is the projected Net Income, what is Operating Cash Flow and EBITDA.
Use the following base-case information: A project under consideration costs $750,000, has a five-year life and has no salvage value. Depreciation is Straight-Line to zero. The Required Return is 17 percent, and the Tax Rate is 34 percent. Sales are projected at 500 units per year. Price per unit is $2,500, Variable Cost per unit is $1,500, and Fixed Costs are $200,000 per year.
It is estimated the unit sales, sales price, variable cost, and fixed cost projections given here are accurate to within 5 percent.
What are the upper and lower bounds for these projections?
What is the base-case NPV?
What are the best- and worst-case scenario NPVs?
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