Question: I have been unable to get b3 correct please help We are evaluating a project that costs $1,180,000, has a ten-year life, and has no
I have been unable to get b3 correct please help
We are evaluating a project that costs $1,180,000, has a ten-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 66,000 units per year. Price per unit is $45. variable cost per unit is $25, and fixed costs are $750,000 per year. The tax rate is 35 percent, and we require a return of 15 percent on this project. a. Calculate the accounting break-even point. (Do not round Intermediate calculations and round your final answer to nearest whole number (e.g. 32).) Break-even point 43400 units b-1 Calculate the base-case cash flow and NPV. (Do not round Intermediate calculations and round your NPV answer to 2 decimal places (e.g., 32.16).) Cash flow NPV $ 411,800 $ 886,782.92 b-2What is the sensitivity of NPV to changes in the sales figure? (Do not round Intermedlate calculations and round your final answer to 3 decimal places (e.g., 32.161).) ANPV/AQ $ 65.24 b-3 Calculate the change in NPV if sales were to drop by 500 units. (Enter your answer as a positive number. Do not round Intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).) NPV would decrease by $ c. What is the sensitivity of OCF to changes in the variable cost figure? (Negative amount should be indicated by a minus sign. Do not round Intermediate calculations and round your final answer to nearest whole number (e.g., 32).) AOCF/AVC $ -42,900.00
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