New Project Example Consider the project discussed in the text The initial cost is $200,000 and the project has a 5-year life.There is no salvage. Depreciation is straight-line,the required return is 12%and the tax rate is 34% The base case NPV is 15,567 区 5
5 New Project Example n Consider the project discussed in the text n The initial cost is $200,000 and the project has a 5-year life. There is no salvage. Depreciation is straight-line, the required return is 12% and the tax rate is 34% n The base case NPV is 15,567
Summary of Scenario Analysis Scenario Net Income Cash Flow NPV IRR Base case 19,800 59,800 15,567 15.1% Worst Case -15,510 24,490 -111,719 -14.4% Best Case 59,730 99,730 159,504 40.9% 6
6 Summary of Scenario Analysis Scenario Net Income Cash Flow NPV IRR Base case 19,800 59,800 15,567 15.1% Worst Case -15,510 24,490 -111,719 -14.4% Best Case 59,730 99,730 159,504 40.9%