We are evaluating a project that costs $872,000, has an 12-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 140,000 units per year. Price per unit is $42, variable cost per unit is $29, and fixed costs are $885,952 per year. The tax rate is 34 percent, and we require a 15 percent return on this project.

Requirement 1:

(a)	Calculate the accounting break-even point. (Do not round your intermediate calculations.)
	(Click to select)74,740 units70,150 units72,640 units73,740 units68,150 units

(b)	What is the degree of operating leverage at the accounting break-even point? (Do not round your intermediate calculations.)
	(Click to select)1.08513.29213.19213.0921.182

Requirement 2:

(a)	Calculate the base-case cash flow. (Do not round your intermediate calculations.)
	(Click to select)$621,178$292,871$661,178$641,178$302,871

(b)	Calculate the NPV. (Do not round your intermediate calculations.)
	(Click to select)$292,871$302,871$2,613,584$2,593,584$2,603,584

(c)	What is the sensitivity of NPV to changes in the sales figure? (Do not round your intermediate calculations.)
	(Click to select)$46.509$46.609$46.409$18.547$18.747

(d)	What your answer tells you about a 500-unit decrease in projected sales? (Do not round your intermediate calculations.)
	(Click to select)-$291,871-$292,871-$23,254.46-$22,254.46-$24,254.46

Requirement 3:

(a)	What is the sensitivity of OCF to changes in the variable cost figure? (Do not round your intermediate calculations.)
	(Click to select)$91,400$93,400$-74,740-$92,400$-73,740

(b)	What your answer tells you about a $1 decrease in estimated variable costs? (Do not round your intermediate calculations.)