Problem 1(25%) Little Freak Inc. is planning to do a new project that requires an initial outlay of $210,000. This project has a life span of 6 years with salvage value of $7,500. The depreciation method used for this project is the straight-line method. The company expects to sell 2,100 units annually at a price of $2,600 per unit sold. Little Freak Inc. also expects their costs to be $1,100 per unit for variable cost and $56,000 per year for fixed cost. The required rate of return for this project is 12.5% with a tax rate of 24%. Using all the information above, please calculate: 1. The upper and lower bound for the unit sales, prices, variable costs, and fixed cost of this project if the accuracy rate is forecasted to be 15%. 2. The NPV in a base-case, best-case, and worst-case scenario of this project. 3. Sensitivity of the base-case NPV from changes in variable costs (assumed VC changes to be $1,600) ! 4. Considering tax, how much is the accounting break-even of this project? Give your interpretation about break-even points. 5. Ignoring tax, what is the degree of operating leverage in the base-case scenario? Interpret your