A. Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $780,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 92,000 units per year. Price per unit is $37, variable cost per unit is $23, and fixed costs are $875,000 per year. The tax rate is 35 percent, and we require a return of 15 percent on this project.

B. Scenario Analysis In the previous problem, suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within 10 percent. Calculate the best-case and worst-case NPV figures.