Question: s Homework Questions i Saved Help Save & Exit Subr 1 We are evaluating a project that costs $864,000 has an eight-year life, and has

 s Homework Questions i Saved Help Save & Exit Subr 1

s Homework Questions i Saved Help Save & Exit Subr 1 We are evaluating a project that costs $864,000 has an eight-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 71.000 units per year Price per unit is $49, variable cost per unit is $33, and fixed costs are $765,000 per year. The tax rate is 35%, and we require a 10% return on this project. a-1. Calculate the accounting break-even point. (Round the final answer to 2 decimal places.) Break even point 54563 units a-2. What is the degree of operating leverage at the accounting break-even point? (Round the final answer to 3 decimal places.) Jok DOL 8.0833 nt b-1. Calculate the base-case cash flow and NPV. (Round the final NPV answers to 2 decimal places. Omit $ sign in your response.) ences Cash flow % Ba ANPY b-2. What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations. Round the final answer to 3 decimal places. Omit $ sign in your response.) ANPV/AQ $ 55.48 c. What is the sensitivity of OCF to changes in the variable cost figure? (Negative answers should be indicated by a minus sign. Omit

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!