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We are evaluating a project that costs $864,000, 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 $864,000, 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 71,000 units per year Price per unit is $49, variable cost per unit is $33, and fixed costs are $765,000 per year. The tax rate is 35%, and we require a 10% return on this project. Given the prevailing market rates, there is a potential that returns on this project could be 10% better, or 10% worse, than the base projection

1. Calculate the accounting break-even for the base case.

2. Calculate the base cash flow and NPV

3. Calculate the accounting break-even for the worst case:

4. Calculate the worst case cash flow and NPV.

5 Calculate the accounting break-even for the best case

6. Calculate the best case cash flow and NPV

7 Given all of this information, would you proceed with this project Justify your response.

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