We are evaluating a project that costs $1,160,000, has a five-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 87,700 units per year. Price per unit is $34.60, variable cost per unit is $20.85, and fixed costs are $757,000 per year. The tax rate is 30 percent, and we require a return of 10 percent on this project.
Required: Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the best-case and worst-case NPV figures. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)
BEST CASE?
WORST CASE?