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We are evaluating a project that costs $843072, 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 $843072, 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 58793 units per year. Price per unit is $42, variable cost per unit is $20, and fixed costs are $417229 per year. The tax rate is 35%, and we require a return of 17% on this project. In dollar terms, what is the sensitivity of NPV to changes in the units sold projection?
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