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S11.05 Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs $845.000, has an eight-year life, and has no satvage value. Assume

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S11.05 Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs $845.000, has an eight-year life, and has no satvage value. Assume that depreciation is straight line to zero over the life of the project. Sales are projected at $1,000 units per year. Price per unit is $53, variable cost per unit is $27, and fixed costs are $950.000 per year. The tax rate is 22 percent, and we require a return of 10 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-2. What is the degree of operating leverage at the accounting break-even point? (Do not round intermediate calculations and round your answer to 3 decimal places, e.9. 32.161.) b-1. 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 NPY answer to 2 decimal places, e.g. 32.16.) b.2. 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.4 32.16.) c. What is the sensitivity of OCF to changes in the variable cost figure? IA negative answer should be indicated by a minus sign. Do not round intermediate calculations.)

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