Emperor's Clothes Fashions can invest $7 million in a new plant for producing invisible makeup. The plant has an expected life of 5 years, and expected sales are 8 million jars of makeup a year. Fixed costs are $2.1 million a year, and variable costs are $1.20 per jar.The product will be priced at $2.70 per jar. The plant will be depreciated straight-line over 5 years to a salvage value of zero. Theopportunity cost of capital is 12%. and the tax rate is 40%.What is project NPV under these base-case assumptions? Note: Do not round intermediate calculations. Enter vour answer in millions, rounded to 2 decimal places.What is NPV if variable costs turn out to be $1.80 per jar? Note: Do not round intermediate calculations. Enter vour answer in millions. rounded to 2 decimal places What is NPV if fixed costs turn out to be $1.7 million per year? Note: Do not round intermediate calculations. Enter your answer in millions, rounded to 2 decimal places.At what price per jar would the project's NV equal zero? Note: Enter your answer in dollars, not in millions. Do not round intermediate calculations. Round vour answer to 2 decimal places.
Emperor's Clothes Fashions can invest $7 million in a new plant for producing invisible makeup. The plant has an expected life of 5 years, and expected sales are 8 million jars of makeup a year. Fixed costs are $2.1 million a year, and variable costs are $1.20 per jar.
The product will be priced at $2.70 per jar. The plant will be depreciated straight-line over 5 years to a salvage value of zero. The
opportunity cost of capital is 12%. and the tax rate is 40%.What is project NPV under these base-case assumptions?
Note: Do not round intermediate calculations. Enter vour answer in millions, rounded to 2 decimal places.
What is NPV if variable costs turn out to be $1.80 per jar?
Note: Do not round intermediate calculations. Enter vour answer in millions. rounded to 2 decimal places
What is NPV if fixed costs turn out to be $1.7 million per year?
Note: Do not round intermediate calculations. Enter your answer in millions, rounded to 2 decimal places.
At what price per jar would the project's NV equal zero?
Note: Enter your answer in dollars, not in millions. Do not round intermediate calculations. Round vour answer to 2 decimal places.
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