We are evaluating a project that costs $943,000, has an eight-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 156,000 units per year. Price per unit is $37, variable cost per unit is $28, and fixed costs are $960,917 per year. The tax rate is 37 percent, and we require a 13 percent return on this project. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 17 percent.
Calculate the best-case NPV.
Calculate the worst-case NPV.