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2. Aurora Corporation is planning to build a RM100,000.00 manufacturing facility to produce its new product. The facility will be depreciated on a straight-line basis

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2. Aurora Corporation is planning to build a RM100,000.00 manufacturing facility to produce its new product. The facility will be depreciated on a straight-line basis to zero over a 5-year period. The sales forecast is RM240,000.00 per year at a price per unit of RM30 and incur a variable cost per unit of RM20 and fixed costs of RM40,000.00 per year. The quantity sold need to be adjusted and it is not off by more than 800 units in either direction. Meanwhile other cash flow components like unit price and variable cost per unit also need to assign such bounds of 10 and 6 percent respectively. The corporate tax rate for the company is 28 percent and the appropriate discount rate is 5 percent. REQUIRED: a. Calculate the upper bounds and lower bounds for this projection. [3 marks] b. Determine the best case and worst case NPV of this projection. [6 marks] c. Calculate the accounting break-even for this projection [3 marks] d. Determine the degree of operating leverage (DOL) at accounting break-even and identify the new OCF if unit sales increase by 20 percent. [3 marks]

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