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Find the NPV sensitivity, NPV change, OCF sensitivity, OCF Change please We are evaluating a project that costs $1,830,000, has a 6-year life, and has
Find the NPV sensitivity, NPV change, OCF sensitivity, OCF Change please
We are evaluating a project that costs $1,830,000, has a 6-year life, and has no salvage value. Assume that depreciation is straight-ine to zero over the life of the project. Sales are projected at 88,600 units per year. Pice per unit is $3825, variable cost per unit is $23.45, and fixed costs are $830.000 per year. The tax rate is 25 percent, and we require a feturn of 9 percent on this project a. Calculate the base-case operating cash flow and NPV. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. What is the sensitivity of NPV to changes in the sales figure? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. If there is a 400 -unit decrease in projected sales. how much would the NPV change? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16. d. What is the sensitivity of OCF to changes in the variable cost figure? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the neerest whole number, e.g., 32 . e. If there is a $1 decrease in estimated variable costs, how much would the OCF change? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32 Step by Step Solution
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