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We are evaluating a project that costs $ 6 1 1 , 8 0 0 , has a seven - year life, and has no

We are evaluating a project that costs $611,800, 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 85,000 units per year. Price per unit is $42, variable cost per unit is $29, and fixed costs are $700,000 per year. The tax rate is 21 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- 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- 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
intermediate calculations and round your answer to 2 decimal places, e.g.,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.)
\table[[a-1. Break-even point,,units],[a-2. DOL,,],[b-1. Cash flow,,],[b-1. NPV,,],[b-2.????NPV????Q,,],[c.????OCF????VC,,]]
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