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Business, 31.10.2019 07:31 vandonquisenberry

We are evaluating a project that costs $500,000, has an eight-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 50,000 units per year. price per unit is $40, variable cost per unit is $25, and fixed costs are $600,000 per year. the tax rate is 35 percent, and we require a return of 12 percent on this project. suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. what is the sensitivity of npv to changes in the sales figure? what is the sensitivity of ocf to changes in the variable cost figure?

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We are evaluating a project that costs $500,000, has an eight-year life, and has no salvage value. a...

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