Home /
Expert Answers /
Finance /
we-are-evaluating-a-project-that-costs-2-130-000-has-a-8-year-life-and-has-no-salvage-value-as-pa404

We are evaluating a project that costs $$2,130,000$, has a 8 -year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 90,600 units per year. Price per unit is $$38.85$, variable cost per unit is $$23.95$, and fixed costs are $$860,000$ per year. The tax rate is 25 percent, and we require a return of 11 percent on this project. a. Calculate the base-case operating cash flow and NPV. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.9., 32.16 . b. What is the sensitivity of NPV to changes in the sales figure? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.9.4 32.161. c. If there is a 450 -unit decrease in projected sales, how much would the NPV change? Note: $A$ negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16 . d. What is the sensitivity of OCF to changes in the variable cost figure? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. e. If there is a $$1$ decrease in estimated variable costs, how much would the OCF change? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

Live Sessions

Online Lab Report Help

Online Project Report Help

Online Assignment Help

Essay Writing Help

CPM Homework Help

Mortgage Calculator

Electrical Engineering

Civil Engineering

Chemical Engineering

Electronics and Communication Engineering

Mathematics

Physics

Chemistry

Software Works/ Computer Science

Other Subjects

100% Correct Solutions

24/7 Availability

One stop destination for all subject

Cost Effective

Solved on Time

Plagiarism Free Solutions

Confidentiality