You are considering a new product launch. The project will cost $$860,000,$ have a $4-$year

life, and have no salvage value; depreciation is straight$-$line to zero. Sales are projected

at $520$ units per year, price per unit will be $$18\mathrm{.}800.$ variable cost per unit will be

$$15\mathrm{.}500,$ and fixed costs will be $$890,000$ per year. The required return on the project is

$13$ percent, and the relevant tax rate is $24$ percent.

a$.$ The unit sales, variable cost, and fixed cost projections given above are probably

accurate to within $+-10$ percent. What are the upper and lower bounds for these

projections? What is the base$-$case NPV$?$ What are the best$-$case and worst$-$case

scenarios? $($A negatlve amount should be Indleated by a minus sign. Do not round

Intermedlate calculations and round your NPV answers to $2$ decimal places, e$.$g$.,$

$3216.)$

b$.$ Calculate the sensitivity of your base$-$case NPV to changes in fixed costs. $($A

negative amount should be indleated by a minus sign. Do not round Intermedlate

calculations and round your answer to $3$ decimal places, e$.$g$.,32181.)$

c$.$ What is the accounting break$-$even level of output for this project? $($Do not round

Intermedate calculations and round your answer to $2$ decimal places, e$.$g$.,3216.)$