compute the DOL for project at sales of 2000 units.

Question 5 Suppose that sales for the project under consideration by Newcombe increases from 2, to 2,200 units per year. Compute the DOL for project at sales of 2,000 units. Use both the definition of the DOL and its algebraic equivalent. Assume Newcombe pays no taxes on this project. 000 units ewcombe & Associates, Inc, is considering the introduction of a new product. Production of the new product requir es an investment of $140.000 in equipment that has a five-year life. The equipment has no salvage value at the end of five years and will be depreciated on a straight-line basis. N ewcombe's required return is 15%, and the tax rate is 34%. The firm has made the following forecasts: Lower Bound Upper Base Case Unit Sales Price per unit Variable cost per unit Fixed cost per year 2,000 $55 $22 1,800 $55 $22 2,200 $55 $22 S10,000$ $10,000$10,000