We are evaluating a project that costs $848,000, has an eight-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 62,000 units per year. Price per unit is $40, variable cost per unit is $20, and fixed costs are $625,000 per year. The tax rate is 35 percent, and we require a return of 20 percent on this project.

Calculate the accounting break-even point.
Calculate the base-case cash flow and NPV.
What is the sensitivity of NPV to changes in the sales figure?
What is the sensitivity of OCF to changes in the variable cost figure?

Shelby company produces three products: product x, product y, and product z. data concerning the three products follow (per unit): product x product y product z selling price $ 85 $ 65 $ 75 variable expenses: direct materials 25.50 19.50 5.25 labor and overhead 25.50 29.25 47.25 total variable expenses 51.00 48.75 52.50 contribution margin $ 34.00 $ 16.25 $ 22.50 contribution margin ratio 40 % 25 % 30 % demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. the same material is used in each product. the material costs $8 per pound, with a maximum of 4,400 pounds available each month. required: a. compute contribution margin per pound of materials used. (round your intermediate calculations and final answers to 2 decimal places.) contribution margin per pound product x $ product y $ product z $ b. which orders would you advise the company to accept first, those for product x, for product y, or for product z? which orders second? third? product x product y product z