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We are evaluating a project that costs $ 7 8 8 , 4 0 0 , has a nine - year life, and has no

We are evaluating a project that costs $788,400, has a nine-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 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 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.)
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,x
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