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We are evaluating a project that costs $744,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straight-line to
We are evaluating a project that costs $744,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 29,000 units per year. Price per unit is $60, variable cost per unit is $20, and fixed costs are $740,000 per year. The tax rate is 23 percent and we require a return of 11 percent on this project Calculate the accounting break-even point (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. Calculate the base-case cash flow and NPV. (Do not round intermediate calculations and round your NPV answer to 2 decimal places, e.g., 32.16.) b-2. What ed . is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g. 32.161.) k 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.) C. ces Break-even point units . b-1 Cash flow NPV b-2 ANPVIAQ |FIAVC C
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