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WWe are evaluating a project that costs $ 1 , 8 6 0 , 0 0 0 , has a 6 - year life, and
WWe are evaluating a project that costs $ has a year life, and has no salvage value. Assume that depreciation is straightline to zero over the life of the project. Sales are projected at units per year. Price per unit is $ variable cost per unit is $ and fixed costs are $ per year. The tax rate is percent, and we require a return of percent on this project.
Calculate the basecase operating cash flow and NPV
What is the sensitivity of NPV to changes in the sales figure?
If there is a unit decrease in projected sales, how much would the NPV change?
What is the sensitivity of OCF to changes in the variable cost figure?
If there is a $ decrease in estimated variable costs, how much would the OCF change?
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