We are evaluating a project that costs $804,000, has an eight 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 95,000 units per year. Price per unit is $41, variable cost per unit is $27, and fixed costs are $925,000 per year. The tax rate is 35% and we require a 15% return on this project.

1) Calculate the base case cash flow and NPV.

2) What is the sensitivity of NPV to changes in the sales figure?

3) What is the sensitivity of OF to changes in the variable cost figure?

4) Find the breakeven point

5) Suppose the projections given for price, quantity, variable costs, and fixed costs are all within 10%. Calculate the best and worst case NPV figure...