We are evaluating a project that costs $$893,000,$ has an $9-$year life, and has no salvage value. Assume that depreciation is straight$-$line to zero over the life of the project. Sales are projected at $117,000$ units per year. Price per unit is $$44,$ variable cost per unit is $$21,$ and fixed costs are $$906,395$ per year. The tax rate is $36$ percent, and we require a $15$ percent return on this project.

Requirement $1$:

$($a$)$ Calculate the accounting break$-$even point. $($Do not round your intermediate calculations.$)$

$($b$)$

What is the degree of operating leverage at the accounting break$-$even point? $($Do not round your intermediate calculations.$)$

Requirement $2$:

$($a$)$ Calculate the base$-$case cash flow. $($Do not round your intermediate calculations.$)$

$($b$)$ Calculate the NPV$.($Do not round your intermediate calculations.$)$

$($c$)$

What is the sensitivity of NPV to changes in the sales figure? $($Do not round your intermediate calculations.$)$

$($d$)$

What your answer tells you about a $500-$unit decrease in projected sales? $($Do not round your intermediate calculations.$)$

Requirement $3$:

$($a$)$

What is the sensitivity of OCF to changes in the variable cost figure? $($Do not round your intermediate calculations.$)$

$($b$)$

What your answer tells you about a $$1$ decrease in estimated variable costs? $($Do not round your intermediate calculations.$)$