I need help with finding the accounting breakeven and cash break even and OCF at financial breakeven with taxes. Also, what excel function to use for NPV calculation in the NPV profile D11 XVfx C TOSK T lapet area: Initial cost Unit sales Price/unit Variable cost/unit B TOYT E Fixed costs Project life 1,000,000 Required return 11% 5,000 Tax rate 21% 7,000 Unit sales uncertainty 8% 6,400 Variable cost uncertainty 270,000 Fixed cost uncertainty 8% 5 Question 1 Base Case Best Case Worst Case Unit sales 5,000 Variable cost/unit 6,400 5,400 1 5,888 4,600 6,912 Fixed costs 270,000 Sales 35,000,000 Variable cost 32,000,000 Fixed cost 270,000 Depreciation 200,000 248,400 37,800,000 31,795,200 248,400 ! 200,000 32,200,000 31,795,200 291,600 291,600 200,000 EBIT 2,530,000 5,556,400 (86,800) Taxes (21%) Net income OCF 531,300 1,166,844 (18,228) 1,998,700 4,389,556 (68,572) 2,138,700 4,589,556 131,428 NPV $7.126.168.77 $15,962,526.33 ($514,255.65) Question 2 fignoring Taxes with Taxes) x Accounting break-even 783.33 783.33 Question 3 fignoring Taxes) with Taxes) x Cach break-even 450.00 Question 4 fignoring Taxes) (with Taxes) x OCF at financial-break even 7x Financial break-even 5,483,333 Question 5 2.350 2.242 2.458 x Degree of operating leverage Greation 6 Draw graph of "Sensitivity of NPV to changes in unit price" Unit Price 5,500 5,750 6,000 6,250 6,500 6,750 7,000 7,250 $5 7,500 $6 7.750 57 8,000 NPV

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question
I need help with finding the accounting breakeven and cash break even and OCF at financial breakeven with taxes. Also,
what excel function to use for NPV calculation in the NPV profile
D11
XVfx
C
TOSK T
lapet area:
Initial cost
Unit sales
Price/unit
Variable cost/unit
B
TOYT
E
Fixed costs
Project life
1,000,000 Required return
11%
5,000 Tax rate
21%
7,000 Unit sales uncertainty
8%
6,400 Variable cost uncertainty
270,000
Fixed cost uncertainty
8%
5
Question 1
Base Case
Best Case
Worst Case
Unit sales
5,000
Variable cost/unit
6,400
5,400 1
5,888
4,600
6,912
Fixed costs
270,000
Sales
35,000,000
Variable cost
32,000,000
Fixed cost
270,000
Depreciation
200,000
248,400
37,800,000
31,795,200
248,400 !
200,000
32,200,000
31,795,200
291,600
291,600
200,000
EBIT
2,530,000
5,556,400
(86,800)
Taxes (21%)
Net income
OCF
531,300
1,166,844
(18,228)
1,998,700
4,389,556
(68,572)
2,138,700
4,589,556
131,428
NPV
$7.126.168.77
$15,962,526.33
($514,255.65)
Question 2
fignoring Taxes
with Taxes)
x Accounting break-even
783.33
783.33
Question 3
fignoring Taxes)
with Taxes)
x Cach break-even
450.00
Question 4
fignoring Taxes)
(with Taxes)
x OCF at financial-break even
7x Financial break-even
5,483,333
Question 5
2.350
2.242
2.458
x Degree of operating leverage
Greation 6
Draw graph of "Sensitivity of NPV to changes in unit price"
Unit Price
5,500
5,750
6,000
6,250
6,500
6,750
7,000
7,250
$5
7,500
$6
7.750
57
8,000
NPV
Transcribed Image Text:I need help with finding the accounting breakeven and cash break even and OCF at financial breakeven with taxes. Also, what excel function to use for NPV calculation in the NPV profile D11 XVfx C TOSK T lapet area: Initial cost Unit sales Price/unit Variable cost/unit B TOYT E Fixed costs Project life 1,000,000 Required return 11% 5,000 Tax rate 21% 7,000 Unit sales uncertainty 8% 6,400 Variable cost uncertainty 270,000 Fixed cost uncertainty 8% 5 Question 1 Base Case Best Case Worst Case Unit sales 5,000 Variable cost/unit 6,400 5,400 1 5,888 4,600 6,912 Fixed costs 270,000 Sales 35,000,000 Variable cost 32,000,000 Fixed cost 270,000 Depreciation 200,000 248,400 37,800,000 31,795,200 248,400 ! 200,000 32,200,000 31,795,200 291,600 291,600 200,000 EBIT 2,530,000 5,556,400 (86,800) Taxes (21%) Net income OCF 531,300 1,166,844 (18,228) 1,998,700 4,389,556 (68,572) 2,138,700 4,589,556 131,428 NPV $7.126.168.77 $15,962,526.33 ($514,255.65) Question 2 fignoring Taxes with Taxes) x Accounting break-even 783.33 783.33 Question 3 fignoring Taxes) with Taxes) x Cach break-even 450.00 Question 4 fignoring Taxes) (with Taxes) x OCF at financial-break even 7x Financial break-even 5,483,333 Question 5 2.350 2.242 2.458 x Degree of operating leverage Greation 6 Draw graph of "Sensitivity of NPV to changes in unit price" Unit Price 5,500 5,750 6,000 6,250 6,500 6,750 7,000 7,250 $5 7,500 $6 7.750 57 8,000 NPV
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