Find:

acounting break-even point

degree of operating leverage at break even

base-case cash flow

npv

sensitivity of npv to changes in quantity sold

what this says about a 500-unit decrease in quantity sold

sensitivity of OCF to changes in variable cost figure

how much OCF will change if variable cost decrease by $1

We are evaluating a project that costs $748,000, has a life of 13 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 103,000 units per year. Price per unit is $38, variable cost per unit is $20, and fixed costs are $759,968 per year. The tax rate is 24 percent, and we require a return of 14 percent on this project