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Just answer B to D - 2 . Table is entered correctly. You are considering o new product launch. The project will cost have e
Just answer B to D Table is entered correctly.
You are considering o new product launch. The project will cost have e four- year life, and heve no salvage value; depreciation is straight-line to zero. Sales ere projected at 330 units per year; price per unit will be $19,600, variable cost per unit will be $14,000, end fixed costs will be S720,OOO per year. The required return on the project is 10 percent, and the relevant tax rete is 21 percent. e. Based on your experience, you think the unit soles, variable cost, and fixed cost projections given here are probably accurete to within percent What are the upper end lower bounds for these projections? What is the base-case NPV? What ere the best-case end worst-case scenarios? (A negative answer should be indicated by minus sign. Do not round intermediate calculations. Round your NPV answers to 2 decimal places, e.g., 32.16. Round your other answers to the nearest whole number, e.g. 32.) Scenario Base Unit Sales 330 Variable Cost 14,000 12,600 15,400 s Fixed Costs 720,000 648: ooo 792, ooo 865,81265 b. c. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (A negative answer should be indicated by minus sign. Do not round intermediate calculations end round your answer to 2 decimal places, e.g., 32.16.) What is the cash break-even level of output for this project (ignoring taxes)? (Do not round intermediate calculations end round your answer to 2 decimal places, e.g., 32.16.) dl. What is the accounting break-even level of output for this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d2. What is the degree of operating leverage et the accounting break-even point? (Do not round intermediate calculations end round your answer to 3 decimal places, e.g., 32.161.) b. ANPV/LFC c. Cash break-even d-l. Accounting break-even d-2. Degree of operating leverage
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