When evaluating a project that cost $756,000, 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 67,000 units per year. Price per unit is $60, variable cost per unit is $25, and fixed cost are $693,000 per year. The tax rate is 35 percent, and the required return is 20 percent on this project.

A. Calculate the accounting break-even point.

Break-even point Units?

B-1 Calculate the base-case cash flow and NPV

Cash flow $?

NPV $?

B-2. What is the sensitivity of NPV to changes in the sales figure?

$?

B-3 Calculate the change in NPV if sales were to drop by 500 units

NPV would decrease or increase by $?

C. What is the sensitivity of OFC to changes in the variable cost figure?

$?