We are evaluating a project that costs $619,500, has a seven-year life, and has no salvage...

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We are evaluating a project that costs $619,500, has aseven-year life, and has no salvage value. Assume that depreciationis straight-line to zero over the life of the project. Sales areprojected at 90,000 units per year. Price per unit is $43, variablecost per unit is $30, and fixed costs are $705,000 per year. Thetax rate is 22 percent, and we require a return of 11 percent onthis project.

a-1.
Calculate the accounting break-even point. (Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)
a-2. What is the degree of operating leverage at the accountingbreak-even point? (Do not round intermediate calculationsand round your answer to 3 decimal places, e.g.,32.161.)
b-1. Calculate the base-case cash flow and NPV. (Do notround intermediate calculations. Round your cash flow answer to thenearest whole number, e.g., 32. Round your NPV answer to 2 decimalplaces, 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 youranswer to 2 decimal places, e.g., 32.16.)
c. What is the sensitivity of OCF to changes in the variable costfigure? (A negative answer should be indicated by a minussign. Do not round intermediate calculations and round your answerto the nearest whole number, e.g., 32. )

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We are evaluating a project that costs $619,500, has aseven-year life, and has no salvage value. Assume that depreciationis straight-line to zero over the life of the project. Sales areprojected at 90,000 units per year. Price per unit is $43, variablecost per unit is $30, and fixed costs are $705,000 per year. Thetax rate is 22 percent, and we require a return of 11 percent onthis project. a-1.Calculate the accounting break-even point. (Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)a-2.What is the degree of operating leverage at the accountingbreak-even point? (Do not round intermediate calculationsand round your answer to 3 decimal places, e.g.,32.161.)b-1.Calculate the base-case cash flow and NPV. (Do notround intermediate calculations. Round your cash flow answer to thenearest whole number, e.g., 32. Round your NPV answer to 2 decimalplaces, 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 youranswer to 2 decimal places, e.g., 32.16.)c.What is the sensitivity of OCF to changes in the variable costfigure? (A negative answer should be indicated by a minussign. Do not round intermediate calculations and round your answerto the nearest whole number, e.g., 32. )

a-1.	Calculate the accounting break-even point. (Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)
a-2.	What is the degree of operating leverage at the accountingbreak-even point? (Do not round intermediate calculationsand round your answer to 3 decimal places, e.g.,32.161.)
b-1.	Calculate the base-case cash flow and NPV. (Do notround intermediate calculations. Round your cash flow answer to thenearest whole number, e.g., 32. Round your NPV answer to 2 decimalplaces, 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 youranswer to 2 decimal places, e.g., 32.16.)
c.	What is the sensitivity of OCF to changes in the variable costfigure? (A negative answer should be indicated by a minussign. Do not round intermediate calculations and round your answerto the nearest whole number, e.g., 32. )