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.
a-2.	What is the degree of operating leverage at the accounting break-even point?
b-1.	Calculate the base-case cash flow and NPV.
b-2.	What is the sensitivity of NPV to changes in the quantity sold?
c.	What is the sensitivity of OCF to changes in the variable cost figure?