Question: You are considering a new product launch. The project will cost $ 2 , 3 5 0 , 0 0 0 , have a four

You are considering a new product launch. The project will cost $2,350,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 330 units per year; price per unit will be $19,600, variable cost per unit will be $14,000, and fixed costs will be $720,000 per year. The required return on the project is 10 percent, and the relevant tax rate is 21 percent.
b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
c. What is the cash break-even level of output for this project (ignoring taxes)?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
d-1. What is the accounting break-even level of output for this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
d-2. What is the degree of operating leverage at the accounting break-even point? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g.,32.161.)

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