We are evaluating a project that costs $1,180,000, has a life of 10 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 59,000 units per year. Price per unit is $45, variable cost per unit is $25, and fixed costs are $750,000 per year. The tax rate is 25 percent and we require a return of 14 percent on this project.

Calculate the accounting break-even point.

Calculate the base-case cash flow and NPV.

What is the sensitivity of NPV to changes in the sales figure?

What is the sensitivity of OCF to changes in the variable cost figure?