Question: Consider a 4-year project which requires an initial cash outlay of $35 000, has an opportunity cost of capital of 10% p.a. and has had

Consider a 4-year project which requires an initial cash outlay of $35 000, has an opportunity cost of capital of 10% p.a. and has had the following variable estimates

Variable	Estimates
Selling price	$70 per unit
Variable cost	$40 per unit
Fixed operating cost	$3,000
Sales volume	500

You are required to conduct additional analyses as follows:

(a) Calculate the NPV of this project (6 marks) (b) Conduct sensitivity analysis regarding the selling price if the estimate of selling price in pessimistic scenario is $68 and that in optimistic scenario is $75 (7 marks) (c) Calculate the break-even point of sales volume (7 marks)

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