Question: We are evaluating a project that costs $ 5 6 9 , 1 0 0 , has a six - year life, and has no

We are evaluating a project that costs $569,100, 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 85,000 units per year. Price per unit is $40, variable cost per unit is $26, and fixed costs are $690,000 per year. The tax rate is 24 percent, and we require a return of 12 percent on this project.
a-1. Calculate the accounting break-even point.
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.
a-2. What is the degree of operating leverage at the accounting break-even point?
Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g.,32.161.
b-1. Calculate the base-case cash flow and NPV.
Note: Do not round intermediate calculations. Round your cash flow answer to the nearest whole number, e.g.,32. Round your NPV answer to 2 decimal places, e.g.,32.16.
b-2. What is the sensitivity of NPV to changes in the quantity sold?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.
c. What is the sensitivity of OCF to changes in the variable cost figure?
Note: A negative anwer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.
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We are evaluating a project that costs $ 5 6 9 ,

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