Question: We are evaluating a project that costs $1.860.000, has a 6 -year life, and has no salvage value. Assume that deprectation is straight-line to zero

We are evaluating a project that costs $1.860.000, has a 6 -year life, and has no salvage value. Assume that deprectation is straight-line to zero creer the life of the project Sales are projected at 89,300 units per year Price per unit is $38.31, variable cost per unit is $2350 and fored costs are $833,000 per yeat. The tax rate is 21 percent, and we require a return of 9 percent on this project. a. Calculote the base-case operating cash flow and NPV. Note: Do not round intermediate calculations and round your answers to 2 decimal ploces, e.g. 3216. b. What is the sensititiy of NPV to changes in the sales figure? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.9., 32.161. C. If there is a 450 -unit decrease in projected sales, how much would the NPV change? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.9, 3216 . d. What is the senstivity of OCF to changes in the variable cost fgure? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer. to the nearest whole number, eg:32. e. If thetess a 51 decrease in estimated varibble costs, how much would the OCF change? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. We are evaluating o project that costs $1.860,000, has a 6 -year iffe, and has no satvage value, Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 89,300 units per year Price per unit is $3831 variable cost per unit is $2350. and fixed costs are $833,000 per year. The tax rate is 21 percent, and we require a return of 9 percent on this project. a. Colculate the bose-case operating cash flow and NPV Note: Do not round intermediate calculotions and round your answers to 2 decimal places, e.g, 3216. b. What is the sensitivity of NPV to changes in the sales figure? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.9. 32.161. c. If there is a 450 - unt decrease in piojected sales, how much would the NPV change? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.9 32.16. d. Whot is the senstivity of OCF to changes in the variable cost figure? Note: A negative answer should be indicated by a minus sign. Do not round intermediete calculations and round your answer to the neerest whole number, e.g. 32 . e. If there is a St decrease in estimated variable costs, how much would the OCF change? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g, 32
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