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We are evaluating a project that costs $887,000, has a eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over
We are evaluating a project that costs $887,000, has a 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 88,000 units per year. Price per unit is $36, variable cost per unit is $24, and fixed costs are $887,887 per year. The tax rate is 31 percent, and we require a 14 percent return on this project. Dariu (c)Calculate the change in NPV If there is a 500-unit decrease in projected sales. (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) Change in NPV $ Requirement 3: (a)What is the sensitivity of OCF to changes in the variable cost figure? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to the nearest whole number. (e.g., 32)) Sensitivity of OCF $ (b)Calculate the change in OCF if there is a $1 decrease in estimated variable costs. (Do not include the dollar sign ($). Round your answer to the nearest whole number. (e.g., 32)) Change in OCF $
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