OW 3. Scenario Analysis [LO2] Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: Price = $1,440 per unit; variable costs = $460 per unit; fixed costs = $3.9 million, quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within 15 percent. What values should the company use for the four variables given here when it performs its best- case scenario analysis? What about the worst-case scenario? 4. Menit Aity Analisis 101 For the Ampak Av in Ahe prAviou Abroh An te aperte frostomer ned about the impact on Pu Na is Concu late your visar. Vhatvalies youldNyou ne tojite 5. Sensitivity Analysis and Break-Even L01, 3) We are evaluating a project that costs $786,000, has an eight-year life, and has no salvage value. Assume that de- preciation is straight-line to zero over the life of the project . Sales are projected at 65,000 units per year. Price per unit is $48, variable cost per unit is $25, and fixed costs are $725,000 per year. The tax rate is 22 percent, and we require a return of 10 percent on this project. a. Calculate the accounting break-even point. What is the degree of operating lever- age at the accounting break-even point? OW 3. Scenario Analysis [LO2] Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: Price = $1,440 per unit; variable costs = $460 per unit; fixed costs = $3.9 million, quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within 15 percent. What values should the company use for the four variables given here when it performs its best- case scenario analysis? What about the worst-case scenario? 4. Menit Aity Analisis 101 For the Ampak Av in Ahe prAviou Abroh An te aperte frostomer ned about the impact on Pu Na is Concu late your visar. Vhatvalies youldNyou ne tojite 5. Sensitivity Analysis and Break-Even L01, 3) We are evaluating a project that costs $786,000, has an eight-year life, and has no salvage value. Assume that de- preciation is straight-line to zero over the life of the project . Sales are projected at 65,000 units per year. Price per unit is $48, variable cost per unit is $25, and fixed costs are $725,000 per year. The tax rate is 22 percent, and we require a return of 10 percent on this project. a. Calculate the accounting break-even point. What is the degree of operating lever- age at the accounting break-even point