Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

.00 points com B... We are evaluating a project that costs $1,675,000, has a six-year life, and has no salvage v that depreciation is straight-line

image text in transcribed
".00 points com B... We are evaluating a project that costs $1,675,000, has a six-year life, and has no salvage v that depreciation is straight-line to zero bver the life of the project. Sales are projected at 91, year. Price per unit is $35.95, variable cost per unit is $21.40, and fixed costs are $775,000 tax rate is 35 percent, and we require a return of 11 percent on this project. Requirement 1: Calculate the base-case cash flow and NPV. (Do not round intermediate calculations. Rou answers to 2 decimal places (e.g., 32.16).) 19... Base-case cash flow NPV Requirement 2: What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate ca Round your answer to 3 decimal places (e.g., 32.161).) Sensitivity of NPV Requirement 3: If there is a 500-unit decrease in projected sales, how much would the NPV drop? (Do not ro intermediate calculations. Input your answer as a positive value. Round your answer to fog 32.16.) ".00 points com B... We are evaluating a project that costs $1,675,000, has a six-year life, and has no salvage v that depreciation is straight-line to zero bver the life of the project. Sales are projected at 91, year. Price per unit is $35.95, variable cost per unit is $21.40, and fixed costs are $775,000 tax rate is 35 percent, and we require a return of 11 percent on this project. Requirement 1: Calculate the base-case cash flow and NPV. (Do not round intermediate calculations. Rou answers to 2 decimal places (e.g., 32.16).) 19... Base-case cash flow NPV Requirement 2: What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate ca Round your answer to 3 decimal places (e.g., 32.161).) Sensitivity of NPV Requirement 3: If there is a 500-unit decrease in projected sales, how much would the NPV drop? (Do not ro intermediate calculations. Input your answer as a positive value. Round your answer to fog 32.16.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions