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You are considering a new product launch. The project will cost $ 2 , 3 5 0 , 0 0 0 , have a four
You are considering a new product launch. The project will cost $ have a fouryear life, and have no salvage value; depreciation is straightline to zero. Sales are projected at units per year; price per unit will be $ variable cost per unit will be $ and fixed costs will be $ per year. The required return on the project is percent, and the relevant tax rate is percent.
b Evaluate the sensitivity of your basecase NPV to changes in fixed costs. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to decimal places, eg
c What is the cash breakeven level of output for this project ignoring taxesDo not round intermediate calculations and round your answer to decimal places, eg
d What is the accounting breakeven level of output for this project? Do not round intermediate calculations and round your answer to decimal places, eg
d What is the degree of operating leverage at the accounting breakeven point? Do not round intermediate calculations and round your answer to decimal places, eg
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