18. Sensitivity Analysis and Break-even. We are evaluating a project that costs $1.68 million, and has a six-year life and no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 90 000 units per year. Price per unit is $37.95, variable cost per unit is $23.20 and fixed costs are $815 000 per year. The tax rate is 30%, and we require a return of 11% on this project.

a. Calculate the base-case cash flow and NPV. What is the sensitivity of NPV to changes in the sales figure? Explain what your answer tells you about a 500-unit decrease in projected sales.

b. What is the sensitivity of OF to changes in the variable cost figure? Explain what your answer tells you about a $1 decrease in estimated variable costs.

19. Scenario Analysis. In the previous problem (question 18), suppose the projections given for price, quantity, variable costs and fixed costs are all accurate to within +10%. Calculate the best-case and worst-case NPV figures.

Please help me to answer question 18 and 19, no excel if possible