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salvage value. Assume that depreciation is straight-line to zero over the life of the project Sales are projected at 90,000 units per year. Price per
salvage value. Assume that depreciation is straight-line to zero over the life of the project Sales are projected at 90,000 units per year. Price per unit is $46, variable cost per unit is $33, and fixed costs are $720,000 per year. The tax rate is 25 percent, and we require a return of 10 percent on this project 666 oints 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., 32.161.) 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 ound your NPV answer to 2 decimal places, e.g., 32.16.) the sensitivity of NPV to changes in the quantity sold? (Do not round 2. intermediate calculations and round your answer to 2 decimal places, e... 32.16.) 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.) Answer is not complete. Break-even point units 62,315 8.992 DOL wor Cash flow 360,025 NPV in NPV AOCF/AVC We are evaluating a project that costs $630,700, has a seven 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 90,000 units per year. Price per unit is $46, variable cost per unit is $33. and fixed costs are $720,000 per year. The tax rate is 25 percent, and we require a return of 10 percent on this project. 16.66 points 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., 32.161.) 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 NPV answer to 2 decimal places, e.g. 32.16.) b- What is the sensitivity of NPV to changes in the quantity sold (Do not round 2. intermediate calculations and round your answer to 2 decimal places, e... 32.16.) 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 found intermediate calculations and round your answer to the nearest whole number. e... 32.) Answer is not complete. units Break-even point DOL 62,315 8.992 N 360,025 Cash flow NPV NPV N
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