Question
We are evaluating a project that costs $841,297, 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 $841,297, 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 62,152 units per year. Price per unit is $40, variable cost per unit is $21, and fixed costs are $422,878 per year. The tax rate is 35%, and we require a return of 19% on this project. In dollar terms, what is the sensitivity of NPV to changes in the units sold projection? (Round answer to 2 decimal places. Do not round intermediate calculations)
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