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You are currently undertaking a planned new Japanese product launch project which cost $896,000. The project is expected to last for 8 years and has
You are currently undertaking a planned new Japanese product launch project which cost $896,000. The project is expected to last for 8 years and has no salvage value. By assuming the depreciation process that occurs automatically straight line, you predict a sales rate of 100,000 units per year. estimation Based on you know that the selling price of the product is $40/unit, cost per unit is $25,000, fixed costs are $900,000, and a 35% tax rate applies. yield the requirement of this project is 15%. a. Calculate the accounting for this project's break-even point. What is the degree of operation leverage at these break-even accounting levels? B. Compute the cash flow base case and project NPV. What is the sensitivity level The NPV of the project if there is a change in sales? Explain your answer if decrease, decrease or increase in sales by 5000 units.
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