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Business, 11.11.2019 19:31 kyleryoung0602

We are evaluating a project that costs $630,700, has a seven-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 90,000 units per year. price per unit is $46, variable cost per unit is $33, and fixed costs are $720,000 per year. the tax rate is 25 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-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.)
b-1. calculate the base-case cash flow and npv. (do not round intermediate calculations. round your cash flow answer to the nearest whole number, e. g., 32. round your npv answer to 2 decimal places, e. g., 32.16.)
b-2. what is the sensitivity of npv to changes in the quantity sold? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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We are evaluating a project that costs $630,700, has a seven-year life, and has no salvage value. as...
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