Question: Detailed problem solving steps are required.Thank you! 5. Sensitivity Analysis and Break-Even We are evaluating a project that costs $9/4,000, has a six-year life, and

 Detailed problem solving steps are required.Thank you! 5. Sensitivity Analysis and Detailed problem solving steps are required.Thank you!

5. Sensitivity Analysis and Break-Even We are evaluating a project that costs $9/4,000, has a six-year life, and has no salvage value. Assume that depreciation s straight-line to zero over the life of the project. Sales are projected at 130,000 units per year. Price per unit is $34.00, variable cost per unit is $19, and fixed costs are $800,000 per year. The tax rate is 35 percent, and we require a 15 per- cent return on this project. a. Calculate the accounting break-even point. What is the degree of operating leverage at the accounting break-even point? b. 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. c. What is the sensitivity of OCF to changes in the variable cost figure? Explain what your answer tells you about a $1 decrease in estimated variable costs

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