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Business, 17.10.2019 21:00 ProfS7843

We are evaluating a project that costs $832,000, 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 40,000 units per year. price per unit is $40, variable cost per unit is $15, and fixed costs are $700,000 per year. the tax rate is 35 percent, and we require a return of 18 percent on this project. suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. calculate the accounting break-even point. what is the degree of operating leverage at 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?

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We are evaluating a project that costs $832,000, has an eight-year life, and has no salvage value. a...
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