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What is the base-case cash flow

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A project has a 7 year life and costs $400,000. Depreciation is straight line to zero over the life of the project and there is no salvage value. The tax rate is 30% and a 12% return on this project. Sales are expected to be 75,000 units per year.

  • If the fixed cost per unit is $600,000 per year, the variable cost is $40 per unit and the revenue for each unit is $50:

Problem a) What is the base-case cash flow

Problem b) What is the NPV

Reference no: EM132792486

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