We are evaluating a project that costs $644,000, has an eight-year life, and has no salvage value. Assume that the depreciation is straight-line to zero over the life of the project. Sales are projected at $70,000 units per year. Price per unit is $37, variable cost per unit is $21, and fixed costs are $725,000 per year. The tax rate is 35%, and we require a 15 percent return on this project.
I don't understand how the NPV new and change in NPV is calculated.