Question: I really need help with requirement 2 parts A,B,D We are evaluating a project that costs $790,000, has an 10 -year life, and has no

I really need help with requirement 2 parts A,B,D
I really need help with requirement 2 parts A,B,D We are evaluating
a project that costs $790,000, has an 10 -year life, and has

We are evaluating a project that costs $790,000, has an 10 -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 132,000 units per year. Price per unit is $45, variable cost per unit is $25, and fixed costs are $803,430 per year. The tax rate is 35 percent, and we require a 10 percent return on this project. Requirement 1: Break-Even (a)Calculate the accounting break-even point. (Do not round your intermediate calculations.) (b)What is the degree of operating leverage at the accounting break-even point? (Do not round your intermediate calculations.) Requirement 2: Base-Case \& NPV Sensitivity (a)Calculate the base-case operating cash flow. (Do not round your intermediate calculations.) (b) Calculate the base-case NPV. (Do not round your intermediate colculotions.) (c) What is the sensitivity/elasticity of NPV to changes in the sales figure? Recall from your economics class that an elasticity measures a percentage change in Requirement 2: Base-Case \& NPV Sensitivity (a) Calculate the base-case operating cash flow. (Do not round your intermediate calculations.) (b) Calculate the base-case NPV. (Do not round your intermediate calculations.) (c) What is the sensitivitylelasticity of NPV to changes in the sales figure? Recall from your economics class that an elasticity measures a percentage change in one variable due to a percentage change in another. So simply increase sales quantity by 1 percent, calculate the new NPV, and then calculate the percentage change in the NPV. (Do not round your intermediate calculations.) (d)Based on this sensitivity, what is the change in NPV (in dollars) if there is a 6 percent decrease in projected sales? (Do not round your intermediate calculations.)

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