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We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $53, varlable cost per unit is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a- What is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculations. Round your cash flow answer to the nearest whole number, e.g., 32 Round your NPV answer to 2 decimal places, e.g., 32.16.) quantitysold? (Do not round

We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $53, varlable cost per unit is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a- What is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculations. Round your cash flow answer to the nearest whole number, e.g., 32 Round your NPV answer to 2 decimal places, e.g., 32.16.) quantitysold? (Do not round

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Check my work We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is stralght-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit Is $53, varlable cost per unit Is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermedlate calculations and round your answer to the nearest whole number, e.g., 32.) a- What Is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculatlons. Round your cash flow answer to the nearest whole number, e.g., 32. Round your NPV answer to 2 decimal places, e.g.., 32.16.) b- What Is the sensitivity of NPV to changes In the quantity sold? (Do not round 2. Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) c. What is the sensitivity of OCF to changes In the varlable cost figure? (A negatlve answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to the nearest whole number, e.g.., 32.) units a-1. Break-even point a-2. DOL b-1. Cash flow NPV b-2. ANPVIAQ C. AOCF/AVC Next > 10:10 PM
Transcribed Image Text:Check my work We are evaluating a project that costs $822,600, has a nine-year life, and has no salvage value. Assume that depreclation Is stralght-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit Is $53, varlable cost per unit Is $37, and fixed costs are $755,000 per year. The tax rate is 22 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even polnt. (Do not round Intermedlate calculations and round your answer to the nearest whole number, e.g., 32.) a- What Is the degree of operating leverage at the accounting break-even polnt? (Do 2. not round Intermedlate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1.Calculate the base-case cash flow and NPV. (Do not round Intermedlate calculatlons. Round your cash flow answer to the nearest whole number, e.g., 32. Round your NPV answer to 2 decimal places, e.g.., 32.16.) b- What Is the sensitivity of NPV to changes In the quantity sold? (Do not round 2. Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) c. What is the sensitivity of OCF to changes In the varlable cost figure? (A negatlve answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to the nearest whole number, e.g.., 32.) units a-1. Break-even point a-2. DOL b-1. Cash flow NPV b-2. ANPVIAQ C. AOCF/AVC Next > 10:10 PM
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