1 answer

You are considering a new product launch. The project will cost $960,000, have a 5-year life,...

Question:

You are considering a new product launch. The project will cost $960,000, have a 5-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 350 units per year; price per unit will be $15,955, variable cost per unit will be $12,000, and fixed costs will be $625,000 per year. The required return on the project is 10 percent and the relevant tax rate is 23 percent. Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within ±10 percent.

a. What are the best-case and worst-case NPVs with these projections? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b. What is the base-case NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the sensitivity of your base-case NPV to changes in fixed costs? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

fx =+M2*-0.2 G3 A B с D E н J K M N о Sales Sale PVIF@ Present 10% Variable Contributio Fixed Depreciati Operating Total cash

Total cash Contribution Fixed Depreciati Operating Sales Sale Variable PVIF@ Present Depreciat cash flows Investment flows va

*Please rate Thumbs up

.

Similar Solved Questions

1 answer
1. Discuss an ethical situation you have been faced with in the past. What did you...
1. Discuss an ethical situation you have been faced with in the past. What did you do? What could have done to adhere to higher ethical standards? Please make sure you provide a detailed example. 2. Do you think its ethical for a company to close a manufacturing facility in Canada and re-open it in ...
1 answer
I need help with problem #3, please and thank you! Problem #2 (25 points) - The...
I need help with problem #3, please and thank you! Problem #2 (25 points) - The True Hanging String Shape After solving for ye(2) for the scenario in Problem #1, show that the mag- nitude of the tension in the string is given by the expression T(X) = To cosh (Como) where To = Tmin is the minimum...
1 answer
Given the following answer the questions below: a) the metal that is the cathode is ________...
Given the following answer the questions below: a) the metal that is the cathode is ________ and the metal that is the anodes _______ b) reduction takes place at the Ag or Cu electrode (circle one) c) Oxidation takes place at the Ag or Cu electrode (circle one) d) Identify the salt bridge on the cel...
1 answer
A 2300-2 resistor and a 1.2-uF capacitor are connected in series across a generator (60.0 Hz,...
A 2300-2 resistor and a 1.2-uF capacitor are connected in series across a generator (60.0 Hz, 120 V rms). Determine the average power delivered to the circuit. 4.514 Additional Materials Section 23.3...
2 answers
How do you find #S_n# for the geometric series #a_1=4#, r=0.5, n=8?
How do you find #S_n# for the geometric series #a_1=4#, r=0.5, n=8?...
1 answer
Question 47 (2 points) Which of the following would commonly appear as a component (an item)...
Question 47 (2 points) Which of the following would commonly appear as a component (an item) of OTHER COMPREHENSIVE INCOME Accrued vacation pay Changes in the market value of inventory Changes in the currency translation amounts related to foreign subsidiaries The unrealized gain or loss on trading ...
1 answer
I need help on these 3 questions please b. There are four isomeric alkyl bromides derived...
I need help on these 3 questions please b. There are four isomeric alkyl bromides derived from the two dit (above) with the formula C.H.Br. draw a structural formula for an To The two different butane isomers la for all four compounds. 3. Draw a structural formula for all the isomers of hexane, C...
1 answer
The circuit shown in the figure below contains three resistors (R1, R2, and R3) and three...
The circuit shown in the figure below contains three resistors (R1, R2, and R3) and three batteries (VA, VB, and VC). The resistor values are: R1=2 Ohms, R2=R3=4 Ohms, and the battery voltages are VA=25 V, VB=15 V, and VC=20 V. When the circuit is connected, what will be the power dissipated by R1?...
1 answer
Sulfur trioxide is made from the reaction of sulfur dioxide and oxygen
Sulfur trioxide is made from the reaction of sulfur dioxide and oxygen. how many grams of SO3 can be made from the reaction of 1.91g SO2 with 1.29g O2? 2 SO2(g) + O2(g)---> 2SO3(g) a) 2.39g b) 3.20g c) 3.23g d) 4.77g e) 6.46g How would i solve this problem?? Im thinking i would use the simples...
1 answer
E. 0.40 37. In a study of the effects of college student employment on academic performance,...
E. 0.40 37. In a study of the effects of college student employment on academic performance, the researchers analyzed the GPAs of a random sample of 55 students who were employed denoted Emp) and a random sample of students who were not employed (denoted NotEmp). In the question, μEmp denotes the...
1 answer
PLEASE HELP FAST AND ALL IN ACCOUNTING. I WILL RATE 5 STARS. Ancestry Furniture Company manufactures...
PLEASE HELP FAST AND ALL IN ACCOUNTING. I WILL RATE 5 STARS. Ancestry Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow: (Click the icon to view the price and cost data.) Ancestry Furniture has three sales representatives: Albert, Buck, and ...
1 answer
MA 485-585 PROBABILITY THEORY FINAL TEST APRIL. 23. 2019 7 7 Let X be an exponential random varia...
MA 485-585 PROBABILITY THEORY FINAL TEST APRIL. 23. 2019 7 7 Let X be an exponential random variable with parameter λ Find the probability distribution and density functions of the variable Y MA 485-585 PROBABILITY THEORY FINAL TEST APRIL. 23. 2019 7 7 Let X be an exponential random variable...
1 answer
Could you help me with this textbook question. A brief explanation would help. 1.) Carbon atoms...
Could you help me with this textbook question. A brief explanation would help. 1.) Carbon atoms generally form four covalent bonds with other atoms. a.) Could you explain the statement above, referring to the valence electrons of a carbon atom. b.) Could you explain how a carbon atom may bond to onl...
1 answer
Prime factorization of 980
prime factorization of 980...
1 answer
Problem 15-3 (Algo) Lease amortization schedule (LO15-2] On January 1, 2021, Majestic Mantles leased a lathe...
Problem 15-3 (Algo) Lease amortization schedule (LO15-2] On January 1, 2021, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majes...
1 answer
A solution that contains #"13.2 g"# of solute in #"250 g"# of #"CCl"_4# freezes at #-33^@ "C"#. What is the FW of the solute? #T_f^"*"# of #"CCl"_4# is #-22.8^@ "C"# and its #K_f = -29.8^@ "C/m"#.
A solution that contains #"13.2 g"# of solute in #"250 g"# of #"CCl"_4# freezes at #-33^@ "C"#. What is the FW of the solute? #T_f^"*"# of #"CCl"_4# is #-22.8^@ "C"# and its #K_f = -29.8^@ "C/m"#....
1 answer
Suppose that your customer places a larger order than they usually would. Unknown to you, they...
Suppose that your customer places a larger order than they usually would. Unknown to you, they have simply changed their safety stock levels and orders will go back to normal after this round of orders. After our discussions about Bullwhip effect, the best response would be to: A.) Increase our safe...