A project under consideration costs $750,000, has a five-year life and has no salvage value. Depreciation is Straight-Line to zero. The Required Return is 17 percent, and the Tax Rate is 34 percent. Sales are projected at 500 units per year. Price per unit is $2,500, Variable Cost per unit is $1,500, and Fixed Costs are $200,000 per year. It is estimated the unit sales, sales price, variable cost, and fixed cost projections given here are accurate to within 5 percent. What are the Base, Upper and Lower bounds for: Sales Variable costs
A project under consideration costs $750,000, has a five-year life and has no salvage value. Depreciation is Straight-Line to zero. The Required Return is 17 percent, and the Tax Rate is 34 percent. Sales are projected at 500 units per year. Price per unit is $2,500, Variable Cost per unit is $1,500, and Fixed Costs are $200,000 per year. It is estimated the unit sales, sales price, variable cost, and fixed cost projections given here are accurate to within 5 percent. What are the Base, Upper and Lower bounds for: Sales Variable costs
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A project under consideration costs $750,000, has a five-year life and has no
salvage value.
The Required Return is 17 percent, and the Tax Rate is 34
percent. Sales are projected at 500 units per year. Price per
unit is $2,500, Variable Cost per unit is $1,500, and Fixed Costs
are $200,000 per year.
It is estimated the unit sales, sales price, variable cost, and fixed cost projections given here are accurate to within 5 percent.
What are the Base, Upper and Lower bounds for:
- Sales
- Variable costs
- EBITDA?
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