Bob is evaluating a project that costs $850,000, has a five-year life, and has no...
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Bob is evaluating a project that costs $850,000, 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 83,000 units per year, price per unit is $50, variable cost per unit is $20, and fixed costs are $2 million per year. The tax rate is 21%, and the required rate of return on the project is 12%. Suppose the projections given for price, quantity, VC per unit, and FC are accurate within +/- 15%. Calculate the best case NPV. (Round 2 decimals)
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