Question: You are evaluating a project that costs $530,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over

You are evaluating a project that costs $530,000, has a five-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 50,000 units per year. Price per unit is $42, variable cost per unit is $22, and fixed costs are $650,000 per year. The tax rate is 30 percent, and you require a 12 percent return on this project.

A) Calculate the accounting break-even point.

B) Calculate the base-case cash flow and NPV

C) Calculate the cash flow and NPV if the sales are projected at 72,000 units

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