What is the NPV for the optimistic scenario

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Question - A 6-year project has sales of 2,000 units, + or - 4%. The variable cost per unit is $8, and the fixed costs are $9,800. The fixed and variable cost estimates are considered accurate within a range of + or - 2%. The sales price is estimated at $22 a unit, + or - 3%. The project requires an initial investment of $42,000 for equipment that will be depreciated straight-line to 0 over the project's life. The equipment has a pre-tax salvage value of $5,000 at the end of the project. The project requires $2,600 in net working capital during its life. The discount rate is 9 percent, and tax rate is 30 percent. What is the NPV for the optimistic scenario?

A. $31,490.07

B. $28,008.46

C. $35,096.52

D. $22,295.33

E. $34,008.12

Reference no: EM133079626

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