Question: We are evaluating a project that costs $841,516, has an 8-year life, and no salvage value. Depreciation is straight-line to zero over the life of

We are evaluating a project that costs $841,516, has an 8-year life, and no salvage value. Depreciation is straight-line to zero over the life of the project.

Projected Sales: 64,481 units per year. Price per unit: $37, Variable Cost per unit: $21, and Fixed Costs: $422,584 per year.

Tax rate: 35%. Required return: 20%.

In dollar terms, what is the sensitivity of NPV to changes in the units sold projection?

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