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Calculate the base case cash flow and npv

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Reference no: EM132413530

If You are evaluating a project that cost $732,000, This project has a five year life, no salvage value, The Depreciation is straight-line to zero for the life of the project. Sales are projected at 55,000 unites per year. Price per unit $60, variable cost per unit is $30 and fixed cost are $732,000 per year. The tax rate is 35 percent and we require a return of 12 percent on this project.

  • What is the break-even point?
  • Calculate the base case cash flow and NPV
  • What is the sensitivity of NPV to changes in the sales figures
  • Calculate the changes in NPV if sales were to drop by 500 units
  • What is the sensitivity of OCF to changes in the variable cost figure

Reference no: EM132413530

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