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We are evaluating a project that costs $ 1 , 1 6 0 , 0 0 0 , has a life of 1 0 years,
We are evaluating a project that costs $ has a life of years, and has no salvage value. Assume that depreciation is straightline to zero over the life of the project. Sales are projected at units per year. Price per unit is $ variable cost per unit is $ and fixed costs are $ per year. The tax rate is percent, and we require a return of percent on this project.
a Calculate the accounting breakeven point Do not round intermediate calculations and round your answer to the nearest whole number, eg
b Calculate the basecase cash flow and NPVDo not round intermediate calculations and round your NPV answer to decimal places, eg
b What is the sensitivity of NPV to changes in the sales figure? Do not round intermediate calculations and round your answer to decimal places, eg
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, eg
tablea Breakeven point,,unitsb Cash flow,,bbc
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