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We are evaluating a project that costs $2,160,000, has a 8-year life, and has no...

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Finance

We are evaluating a project that costs $2,160,000, has a 8-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 90,900 units per year. Price per unit is $38.91, variable cost per unit is $24.00, and fixed costs are $863,000 per year. The tax rate is 21 percent, and we require a return of 11 percent on this project. 1. Calculate the base-case operating cash flow 2. Calculate the the base-case NPV 3. NPV sensitivity? 4. NPV change? 5. OCF sensitivity? 6. OCF change?

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