We are evaluating a project that costs $604,100, has a seven-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the profect. Sales are projected at 90.000 untts per year. Price per unit is $44, variable cost per unit is $31, and fixed costs are $710,000 per year. The tax rate is 23 percent, and we

require a return of 12 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)

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 NP. (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.)

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.)

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

caiculations id round your ant wer to the nearest whole number. e.g.. 32.

a.1. Break-even point........? units

a.2. DOL......?

b.1. Cash flow....?

b. 1. NPV?

b.2. Change in NPV/Change in Q?

c. Change in OCF/ Change in Variable Cost?