Problem $11-5$ Sensitivity Analysis and Break$-$Even $[$LO$1,3]$

We are evaluating a project that costs $$788,400,$ has a nine$-$year life, and has no salvage value. Assume that depreciation is straight$-$line to zero over the life of the project. Sales are projected at $75,000$ units per year. Price per unit is $$52,$ variable cost per unit is $$36,$ and fixed costs are $$750,000$ per year. The tax rate is $21$ percent, and we require a return of $12$ percent on this project.

a$-1.$ Calculate the accounting break$-$even point. $($Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

a$-$ What is the degree of operating leverage at the accounting break$-$even point? $($Do

$2.$ not round intermediate calculations and round your answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

b$-$ Calculate the base$-$case cash flow and NPV$.($Do not round intermediate

calculations. Round your cash flow answer to the nearest whole number, e$.$g$.,32.$ Round your NPV answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$-$ What is the sensitivity of NPV to changes in the quantity sold? $($Do not round

intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$.$ What is the sensitivity of OCF to changes in the variable cost figure? $($A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

$\backslash$table$[[$a$-1.$ Break$-$even point,,$52,350,$units$],[$a$-2.$ DOL,,,$],[$b$-1.$ Cash flow,$$,373,896,],[$b$-1.$ NPV$,,,],[$b$-2.\frac{?}{{?}_{\frac{?}{?}}NP}\frac{V}{\frac{?}{{?}_{\frac{?}{?}}}}Q,,,],[$c$.\frac{?}{{?}_{\frac{?}{?}}\text{O}\text{C}\text{F}}\frac{\text{I}}{{?}_{\frac{?}{?}}}VC,,,]]$