Answered step by step
Verified Expert Solution
Question
1 Approved Answer
We are evaluating a project that costs $837,712, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $837,712, 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 55,271 units per year. Price per unit is $42, variable cost per unit is $16, and fixed costs are $418,767 per year. The a return of 22% on this project. In dollar terms, what is the sensitivity of NPV to changes in the units sold projection? The sensitivity is just the first order condition in the calculus. For example, in our the change starting points and ending points will not affect the question. (Round answer to 0 decimal places. Do not round intermediate calculations)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started