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We are evaluating a project that costs $860,000, has an 6-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 87,000 units per year. Price per unit is $42, variable cost per unit is $28, and fixed costs are $873,760 per year. The tax rate is 35 percent, and we require a 18 percent return on this project. Requirement 1: Break-Even (a)Calculate the accounting break-even point. (Do not round your intermediate calculations.) (Click to select) (b)What is the degree of operating leverage at the accounting break-even point? (Do not round your intermediate calculations.) (Click to select) S Requirement 2: Base-Case & NPV Sensitivity (a)Calculate the base-case operating cash flow. (Do not round your intermediate calculations.) (Click to select) (b)Calculate the base-case NPV. (Do not round your intermediate calculations.) (Click to select) (c) What is the sensitivity/elasticity of NPV to changes in the sales figure? Recall from your economics class that an elasticity measures a percentage change in one variable due to a percentage change in another. So simply increase sales quantity by 1 percent, calculate the new NPV, and then calculate the percentage change in the NPV. (Do not round your intermediate calculations.) (Click to select)

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