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  3. a project has a 7 year life and costs $400,000. de

A project has a 7 year life and costs $400,000. Depreciation is straight line to...

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Accounting

A project has a 7 year life and costs $400,000. Depreciation is straight line to zero over the life of the project and there is no salvage value. The tax rate is 30% and a 12% return on this project. Sales are expected to be 75,000 units per year.

If the fixed cost per unit is $600,000 per year, the variable cost is $40 per unit and the revenue for each unit is $50:

  1. What is the base-case cash flow
  2. What is the NPV

Please show all steps so I can understand the question. Please don't use excel and make sure content is very easy to read. Thank you will be happy to give a thumbs up.

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