b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Anegative answer should be indicated by a minus sign. Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)C. What is the cash break-even level of output for this project (ignoring taxes)? (Do notround intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)d-1. What is the accounting break-even level of output for this project? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)d-2. What is the degree of operating leverage at the accounting break-even point? (Donot round intermediate calculations and round your answer to 3 decimal places,e.g., 32.161.)b.ANPV/AFCc. Cash break-evend-1. Accounting break-evend-2. Degree of operating leverage Problem 11-19 Project Analysis [LO1, 2, 3, 4]You are considering a new product launch. The project will cost $2,375,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales areprojected at 340 units per year; price per unit will be $19,900, variable cost per unit willbe $14,150, and fixed costs will be $730,000 per year. The required return on the projectis 11 percent, and the relevant tax rate is 22 percent.a. Based on your experience, you think the unit sales, variable cost, and fixed costprojections given here are probably accurate to within 10 percent. What are theupper and lower bounds for these projections? What is the base-case NPV? What arethe best-case and worst-case scenarios? (A negative answer should be indicated bya minus sign. Do not round intermediate calculations. Round your NPV answers to2 decimal places, e.g., 32.16. Round your other answers to the nearest wholenumber, e.g. 32.)ScenarioBaseBestWorstUnit Sales340374Variable Cost$14,150 $12,735Fixed Costs730,000 $657,000NPV3.608,000.004,175,000.00

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Description: b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (Anegative answer should be indicated by a minus sign. Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)C. What is the cash bre

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b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (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.) c. What is the cash break-even level of output for this project (ignoring taxes)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. Evaluate the sensitivity of your base-case NPV to changes in fixed costs. (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.) c. What is the cash break-even level of output for this project (ignoring taxes)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 17PROB

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