Question: whay is the correct answer for NPV? We are evaluating a project that costs $844200, has a nine-year life, and has no salvage value. Assume
We are evaluating a project that costs $844200, has a nine-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 80,000 units per year. Price per unit is $54, variable cost per unit is $38, and fixed costs are $760,000 per year. The tax rate is 23 percent, and we require a return of 10 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., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round intermediate calculetions. Round your cosh flow answer to the nearest whole number, e.g., 32 Round your NPV answer to 2 decimal places, e.g.. 32.16.) b- What is the sensitivity of NPV to changes in the quantity sold? (Do not round 2. intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 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.) c. 8 Answer is complete but not entirely correct. 53,353units Break-even point a DOL 1. a- 2. b Cash flow 9.102 421.974 1,644,158 32 8 NPV 0 95 61,600 2
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