Sensitivity of npv to changes in the units sold projection

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Reference no: EM131986134

We are evaluating a project that costs $836754, 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 62919 units per year. Price per unit is $36, variable cost per unit is $18, and fixed costs are $415465 per year. The tax rate is 35%, and we require a return of 19% on this project. In percentage terms, what is the sensitivity of NPV to changes in the units sold projection?

Reference no: EM131986134

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