You are considering a new product launch. The project will cost $2,150,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 150 units per year; price per unit will be $28,000, variable cost per unit will be $17,000, and fixed costs will be $580,000 per year. The required return on the project is 12 percent, and the relevant tax rate is 34 percent.

a.

b.	Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places. (e.g., 32.161))

c.	What is the cash break-even level of output for this project (ignoring taxes)? (Round your answer to 2 decimal places. (e.g., 32.16))

Cash break-even

d-1	What is the accounting break-even level of output for this project? (Round your answer to 2 decimal places. (e.g., 32.16))

Accounting break-even

d-2	What is the degree of operating leverage at the accounting break-even point? (Round your answer to 3 decimal places. (e.g., 32.161))

Degree of operating leverage