Qz. ABC Corp. is planning an investment of $95.000,000, WACC is 10%, the economic life of the investment is 8 years and other data are given in the following figure. Variables Worst case Expected (base) Best case 1,450,000 Market size Market share 1,150,000 0.20 500 450 1,250,000 Unit price(5) variable cost/unit (5) Fix cost/ per unit (S) Considering a worst case, base case, and best case, calculate (at least for the base case) the NPV and interpret the feasibility of the investment. 25 D.25 525 430 D.30 23 550 410 20

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
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Q2. ABC Corp. is planning an investment of $95.000,000, WACC is 10% , the economic life of the
investment is 8 years and other data are given in the following figure.
Variables
Worst case
Expected (base) Best case
1,250,000
1,450,000
Market size
Market share
1,150,000
0.20
500
Unit price($)
variable cost/unit (5)
Fix cost/ per unit (S)
Considering a worst case, base case, and best case, calculate (at least for the base case) the NPV
and interpret the feasibility of the investment.
450
b.25
25
525
430
b.30
23
$50
410
20
Transcribed Image Text:Q2. ABC Corp. is planning an investment of $95.000,000, WACC is 10% , the economic life of the investment is 8 years and other data are given in the following figure. Variables Worst case Expected (base) Best case 1,250,000 1,450,000 Market size Market share 1,150,000 0.20 500 Unit price($) variable cost/unit (5) Fix cost/ per unit (S) Considering a worst case, base case, and best case, calculate (at least for the base case) the NPV and interpret the feasibility of the investment. 450 b.25 25 525 430 b.30 23 $50 410 20
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