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a. We are evaluating a project that costs $1,100,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero
a. We are evaluating a project that costs $1,100,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 47,000 units per year. Price per unit is $42, variable cost per unit is $19, and fixed costs are $770,000 per year. The tax rate is 21 percent, and we require a return of 10 percent on this project. Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Calculate the base-case cash flow and NPV. (Do not round intermediate calculations and round your NPV answer to 2 decimal places, e.g., 32.16.) b-2. What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-3. Calculate the change in NPV if sales were to drop by 500 units. (Enter your answer as a positive number. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the sensitivity of OCF to changes in the variable cost figure? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a. 11,130.95 units Break-even point b-1. Cash flow NPV b-2. ANPVIAQ b-3. NPV would c. AOCF/AVC by
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