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Firm XXX is evaluating a project that costs $1,080,000,has a ten-year life,and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 52,000 units per year. Price per unit is $ 50,variable cost per year is $30 and fixed costs are $730,000 per year. The tax rate is 35 percent,and we required a 15 percent return on this project. Suppose the projections given for price,quantity,variable costs, and fixed costs are all accurate to within +-10 percent. What are the best-case NPV and the worse-case NPV respectively?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92260699

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