We are evaluating a project that costs $604,000, has an 8-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 55,000 units per year. Price per unit is $36, variable cost per unit is $17, and fixed costs are $685,000 per year. The tax rate is 21 percent and we require a return of 15 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?