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8 points While evaluating a project that costs $2.58 million having 6 years life has no salvage value under straight line depreciation method. Estimated sales

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8 points While evaluating a project that costs $2.58 million having 6 years life has no salvage value under straight line depreciation method. Estimated sales at 3150000 per year, price per unit is 455. variable cost per unit is 12.55 and fixed cost $37500 per year. The tax rate and the required rate of return is 18 and 11 respectively. 1. Find the base cash flow and NPV (show the steps of calculations) (3.5 points) 2. What is the sensitivity of NPV to change in sales figure? (show the steps of calculation) (3.5 points) 3. Find the NPV change for a 400 unit decrease of projected sales show the steps of calculation (1 points) For the toolbar, press ALT+F10 (PC) or ALT FN+F10 (Mac) BIUS Paragraph v Arial 14px x x y !!! III 2 T. X Q - TT 99 2

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