We are evaluating a project that costs $768,000, has a shelf 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 104,000 units per year. Price per unit is $36, variable cost per unit is $29, and fixed costs are $777,984 per year. The tax rate is 22 percent, and we require a return of 12 percent on this project.

1a.) Calculate the accounting break-even point.

1b.) What is the degree of operating leverage at the accounting break-even point?

2a.) Calculate the base-case cash flow.

2b.) Calculate the NPV.