What is the sensitivity of npv to changes in the units

Reference no: EM133273672

Question - We are evaluating a project that costs $835,633, 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 61,004 units per year. Price per unit is $42, variable cost per unit is $19, and fixed costs are $419,356 per year. The tax rate is 35%, and we require a return of 20% on this project.

In dollar terms, what is the sensitivity of NPV to changes in the units sold projection?

Reference no: EM133273672

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