Problem $11-5$ Sensitivity Analysis and Break$-$Even $[$LO$1,3]$

We are evaluating a project that costs $$583,800,$ has a six$-$year life, and has no salvage value. Assume that depreciation is straight$-$line to zero over the life of the project. Sales are projected at $90,000$ units per year. Price per unit is $$41,$ variable cost per unit is $$27,$ and fixed costs are $$695,000$ per year. The tax rate is $25$ percent, and we require a return of $9$ percent on this project.

a$-1.$Calculate the accounting break$-$even point. $($Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

a$-$ What is the degree of operating leverage at the accounting break$-$even point? $($Do

$2.$ not round intermediate calculations and round your answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

b$-$ Calculate the base$-$case cash flow and NPV$.($Do not round intermediate

calculations. Round your cash flow ar$($swer to the nearest whole number, e$.$g$.,32.$ Round your NPV answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$-$ What is the sensitivity of NPV to changes in the quantity sold? $($Do not round

intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$.$ What is the sensitivity of OCF to changes in the variable cost figure? $($A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

$\backslash$table$[[$a$-1.$ Break$-$even point,,units$],[$a$-2.$ DOL,,$],[$b$-1.$ Cash flow,,$],[$b$-1.$ NPV$,,],[$b$-2.\frac{?}{{?}_{\frac{?}{?}}NP}\frac{V}{\frac{?}{{?}_{\frac{?}{?}}}}Q,,],[$c$.\frac{?}{{?}_{\frac{?}{?}}OC}\frac{F}{\frac{?}{{?}_{\frac{?}{?}}}}VC,,]]$