Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that co
ID: 2695183 • Letter: S
Question
Sensitivity Analysis and Break-Even [LO1, 3] We are evaluating a project that costs $924,000, 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 75,000 units per year. Price per unit is $46, variable cost per unit is $31, and fixed costs are $825,000 per year. The tax rate is 35 percent, and we require a 15 percent return on this project. Calculate the accounting break-even point. What is the degree of operating leverage at the accounting break-even point? (Round your answer to 3 decimal places. (e.g., 32.161)) Calculate the base-case cash flow and NPV. (Round your NPV answers to 2 decimal places. (e.g., 32.16)) What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161)) What is the sensitivity of OCF to changes in the variable cost figure? (Negative amount should be indicated by a minus sign.)Explanation / Answer
do you have a calculator
Related Questions
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.