You are considering a new product launch. The project will cost $2,400,000, have a 4-year life, and have no salvage value; depreciation is straight-line to 0. Sales are projected at 180 units per year; price per unit will be $30,000; variable cost per unit will be $19,500; and fixed costs will be $630,000 per year. The required return on the project is 12%, and the relevant tax rate is 35%.

a. Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within 10%. 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? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final NPV answers to 2 decimal places. Omit $ sign in your response.)

Scenario	Unit Sales	Variable Cost	Fixed Costs	NPV
Base		$	$	$
Best		$	$	$
Worst		$	$	$

b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 3 decimal places. Omit $ sign in your response.)

NPV/FC $

c. What is the cash break-even level of output for this project (ignoring taxes)? (Round the final answers to the nearest whole unit.)

Cash breakeven units

d-1. What is the accounting break-even level of output for this project? (Round the final answers to the nearest whole unit.)

Accounting breakeven units

d-2. What is the degree of operating leverage at the accounting break-even point? (Round the final answer to 4 decimal places.)

Degree of operating leverage

You are considering a new product launch. The project will cost $2,400,000, have a 4 -year life, and have no salvage value; depreclation is straight-Ine to 0 . Sales are projected at 180 units per year; price per unit will be $30,000; varlable cost per unit will be $19,500; and fixed costs will be $630,000 per year. The required return on the project is 12%, and the relevant tax rate is 35%. a. Based on your experlence, you think the unit sales, varlable cost, and fixed cost projections given here are probably accurate to with n10%. What are the upper and lower bounds for these projections? What is the base-case NPV? What are the best-case and worst-case scenarlos? (Negatlve answers should be Indlcated by a minus sign. Do not round Intermedlate calculatlons. Round the final NPV answers to 2 decimal places. Omlt $ sign In your response.) b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Negative answers should be Indlcated by a minus sign. Do not round Intermedlate calculations. Round the final answer to 3 decimal places. Omlt $ sign In your response.) NPV/FC$ c. What is the cash break-even level of output for this project (Ignoring taxes)? (Round the final answers to the nearest whole unit.) Cash break-even units d-1. What is the accounting break-even level of output for this project? (Round the flnal answers to the nearest whole unit.) Accounting break-even units d-2. What is the degree of operating leverage at the accounting break-even point? (Round the final answer to 4 decimal places.) Degree of operating leverage You are considering a new product launch. The project will cost $2,400,000, have a 4 -year life, and have no salvage value; depreclation is straight-Ine to 0 . Sales are projected at 180 units per year; price per unit will be $30,000; varlable cost per unit will be $19,500; and fixed costs will be $630,000 per year. The required return on the project is 12%, and the relevant tax rate is 35%. a. Based on your experlence, you think the unit sales, varlable cost, and fixed cost projections given here are probably accurate to with n10%. What are the upper and lower bounds for these projections? What is the base-case NPV? What are the best-case and worst-case scenarlos? (Negatlve answers should be Indlcated by a minus sign. Do not round Intermedlate calculatlons. Round the final NPV answers to 2 decimal places. Omlt $ sign In your response.) b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Negative answers should be Indlcated by a minus sign. Do not round Intermedlate calculations. Round the final answer to 3 decimal places. Omlt $ sign In your response.) NPV/FC$ c. What is the cash break-even level of output for this project (Ignoring taxes)? (Round the final answers to the nearest whole unit.) Cash break-even units d-1. What is the accounting break-even level of output for this project? (Round the flnal answers to the nearest whole unit.) Accounting break-even units d-2. What is the degree of operating leverage at the accounting break-even point? (Round the final answer to 4 decimal places.) Degree of operating leverage